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click here for freelancing tutoring sitesA.C. No. 1359 October 17, 1991GENEROSA BUTED and BENITO BOLISAY, petitioners, vs.ATTY. HAROLD M. HERNANDO, respondent.Jorge A. Dolorfino for petitioners.R E S O L U T I O N

PER CURIAM:

On 22 August 1974, spouses Generosa Buted and Benito Bolisay filed an administrative complaint for malpractice against respondent Atty. Harold M. Hernando, charging the latter with having wantonly abused professional secrets or information obtained by him as their counsel.

After respondent Hernando filed his Answer on 25 June 1974, the Court, in a resolution dated 4 October 1974 referred the complaint to the Solicitor-General for investigation, report and recommendation.

On 10 February 1975, complainants presented a Joint Affidavit of Desistance. 1

On 24 October 1975, the Solicitor-General conducted a hearing where respondent took the witness stand on his own behalf.

The record of the case shows the following background facts:

In an action for partition instituted by Generosa as compulsory heir of the deceased Teofilo Buted, respondent was counsel for Luciana Abadilla and a certain Angela Buted. Involved in said partition case was a parcel of land Identified as Lot 9439-B. Respondent ultimately succeeded in defending Luciana Abadilla's claim of exclusive ownership over Lot 9439-B. When Luciana died, respondent withdrew his appearance from that partition case.

It appears that Luciana Abadilla sold the lot to Benito Bolisay and a new Transfer Certificate of Title over the lot was issued in the name of complainant spouses.

When an action for specific performance was lodged by a couple named Luis Sy and Elena Sy against Benito Bolisay as one of the defendants, 2 the latter retained the services of respondent Atty. Hernando however claims that he rendered his services to Benito Bolisay free of charge. Subject of this case was a contract of lease executed by Benito's co-defendant therein, Enrique Buted, over a house standing on a portion of Lot No. 9439-B. It appears that the Sy's were claiming that the lease extended to the aforementioned lot. Benito was then asserting ownership over the realty by virtue of a Deed of Sale executed by Luciana Abadilla in his favor. Eventually, the Sy's were ordered to vacate the house subject of the lease. Respondent avers that the relationship between himself and Benito Bolisay as regards this case was terminated on 4 December 1969. 3

On 23 February 1974, respondent Hernando, without the consent of the heirs of Luciana Abadilla and complainant spouses, filed a petition on behalf of the heirs of Carlos, Dionisia and Francisco all surnamed Abadilla, seeking the cancellation of the Transfer Certificate of Title (TCT) of complainant spouses over the lot. Carlos, Dionisia and Francisco were Luciana's registered co-owners in the original certificate of title covering Lot No. 9439-B. 4 At the hearing, respondent Hernando testified that if the petition for cancellation of TCT was granted, Lot 9439-B would no longer be owned by complainant spouses but would be owned in common by all the heirs of Luciana Abadilla. 5

Complainant spouses, upon learning of respondent's appearance against them in the cadastral proceeding, manifested their disapproval thereof in a letter dated 30 July 1974. 6 Respondent however, pursued the case until it was eventually dismissed by the trial court on 2 September 1974 on the ground of prescription. 7

At the hearing before the Office of the Solicitor General and in his Answer, respondent Hernando admitted his involvement in the cadastral case as counsel for the Abadillas but denied having seen or taken hold of the controversial Transfer Certificate of Title, and having availed himself of any confidential information relating to Lot 9439-B.

In its Report and Recommendation dated 29 March 1990, the Solicitor General recommends that respondent be suspended from the practice of law for three (3) months for violation of the Canons of Professional Ethics by representing clients with conflicting interests, and filed before this Court the corresponding Complaint 8 dated 30 March 1990.

The issue raised in this proceeding is: whether or not respondent Hernando had a conflict of interests under the circumstances described above.

The Canons of Professional Ethics, the then prevailing parameters of behavior of members of the bar, defines a conflict of interests situation in the following manner:

6. Adverse influence and conflicting interests.—

xxx xxx xxx

It is unprofessional to represent conflicting interests, except by express consent of all concerned given after a full disclosure of the facts. Within the meaning of this canon, a lawyer represents conflicting interests when, in behalf of one client, it is his duty to contend for that which duty to another client requires him to oppose.

The obligation to represent the client with undivided fidelity and not to divulge his secrets or confidence forbids also the subsequent acceptance of retainers or employment from others in matters adversely affecting any interest of the client with respect to which confidence has been reposed.(Emphasis supplied)

Though as regards the first and second cases handled by respondent, no conflict of interest existed, the same cannot be said with respect to the action for specific performance and the cadastral proceeding. By respondent's own admission, he defended the right of ownership over Lot 9439-B of complainant Benito Bolisay in the action for specific performance. He assailed this same right of ownership when he subsequently filed a petition for cancellation of complainants' Transfer Certificate of Title over that same lot. Respondent Hernando was in a conflict of interest situation.

It is clear from the above-quoted portion of the Canons of Professional Ethics that in cases where a conflict of interests may exist, full disclosure of the facts and express consent of all the parties concerned are necessary. 9The present Code of Professional Responsibility is stricter on this matter considering that consent of the parties is now required to be in written form. 10In the case at bar, such consent was wanting.

Respondent persistently argues that contrary to the claims of complainant spouses, he had never seen nor taken hold of the Transfer Certificate of Title covering Lot No. 9439-B nor obtained any confidential information in handling the action for specific performance. 11 The contention of respondent is, in effect, that because complainant has not clearly shown that respondent had obtained any confidential information from Benito Bolisay while representing the latter in the action for specific performance, respondent cannot be penalized for representing conflicting interests. That is not the rule in this jurisdiction. The rule here is, rather, that the mere fact that respondent had acted as counsel for Benito Bolisay in the action for specific performance should have precluded respondent from acting or appearing as counsel for the other side in the subsequent petition for cancellation of the Transfer Certificate of Title of the spouses Generosa and Benito Bolisay. There is no necessity for proving the actual transmission of confidential information to an attorney in the course of his employment by his first client in order that he may be precluded from accepting employment by the second or subsequent client where there are conflicting interests between the first and the subsequent clients. The reason for this rule was set out by the Court in Hilado v. David 12 in the following terms:

Communications between attorney and client are, in a great number of litigations, a complicated affair, consisting of entangled relevant and irrelevant, secret and well known facts. In the complexity of what is said in the course of the dealings between an attorney and a client, inquiry of the nature suggested would lead to the revelation, in advance of the trial, of other matters that might only further prejudice the complainant's cause. And the theory would be productive of other unsalutary results. To make the passing of confidential communication a condition precedent; i.e., to make the employment conditioned on the scope and character of the knowledge acquired by an attorney in determining his right to change sides, would not enhance the freedom of litigants, which is to be sedulously fostered, to consult

with lawyers upon what they believe are their rights in litigation. The condition would of necessity call for an investigation of what information the attorney has received and in what way it is or it is not in conflict with his new position. Litigants would be in consequence be wary in going to an attorney, lest by an unfortunate turn of the proceeding, if an investigation be held, the court should accept the attorney's inaccurate version of the facts that came to him.

Hence the necessity of setting down the existence of the bare relationship of attorney and client as the yardstick for testing incompatibility of interests. This stern rule is designed not alone to prevent the dishonest practitioner from fraudulent conduct, but as well to protect the honest lawyer from unfounded suspicion of unprofessional practice. (Strong vs. Int. Bldg., etc.; Ass'n. 183 III., 97; 47 L.R.A., 792) It is founded on principles of public policy, on good taste. As has been said another case, the question is not necessarily one of the rights of the parties, but as to whether the attorney has adhered to proper professional standard. With these thoughts in mind, it behooves attorneys, like Caesar's wife, not only to keep inviolate the client's confidence, but also to avoid the appearance of treachery and double-dealing. Only thus can litigants be encouraged to entrust their secrets to their attorneys which is of paramount importance in the administration of justice. 13 (Emphasis supplied)

This Court went further in San Jose v. Cruz, 14 where the lawyer was charged with malpractice for having represented a new client whose interest was opposed to those of his former clients in another case:

The record shows that the respondent offered his services to the Matienzo spouses knowing that the petitioner had obtained a favorable judgment in the civil case No. 5480 and that his efforts in the subsequent civil case No. 5952 would frustrate said judgment and render it ineffectual, as has really been the result upon his obtaining the writ of injunction above-mentioned. Obviously his conduct is unbecoming to an attorney and cannot be sanctioned by the courts. An attorney owes loyalty to his client not only in the case in which he has represented him but also after the relation of attorney and client has terminated and it is not a good practice to permit him afterwards to defend in another case other persons against his former client under the pretext that the case is distinct from, and independent of the former case. 15 (Emphasis supplied)

The appropriate rule has been expressed by Justice Malcolm in the following manner:

An attorney is not permitted, in serving a new client as against a former one, to do anything which will injuriously affect the former client in any manner in which the attorney formerly represented him, though the relation of attorney and client has terminated, and the new employment is in a different case; nor can the attorney use against his former client any knowledge or information gained through their former connection. 16 (Emphasis supplied)

The absence of monetary consideration does not exempt the lawyer from complying with the prohibition against pursuing cases where a conflict of interest exists. The prohibition attaches from the moment the attorney-client relationship is established and extends beyond the duration of the professional relationship.

The Court therefore agrees with the Solicitor-General that respondent Hernando is guilty of violation of the Canons of Professional Ethics by representing clients with conflicting interests. We believe, however, that a heavier penalty is appropriate.

ACCORDINGLY, the Court Resolved to SUSPEND Atty. Harold M. Hernando from the practice of law for a period of five (5) months, with a WARNING that

repetition of the same or similar offense will warrant a more severe penalty. A copy of this Resolution shall be furnished to all courts and to the Office of the Bar Confidant and spread on the personal record of respondent.

Fernan, C.J., Gutierrez, Jr., Feliciano, Bidin and Davide, Jr., JJ., concur

CBD CASE No. 251 July 11, 1995ADELINA T. VILLANUEVA, complainant, vs.ATTY. TERESITA STA. ANA, respondent.

PER CURIAM:

Complainant Adelina T. Villanueva has sought the disbarment of respondent Attorney Teresita Sta. Ana.

From the Report and Recommendation of the Commission on Bar Discipline and the records of the case, it would appear that complainant first met respondent lawyer some time in April 1992 when the former brought certain documents to the latter for notarization. Respondent later learned that complainant had planned to borrow a substantial sum from a bank or lending institution. Respondent represented that she could facilitate the loan if complainant could put up a land collateral and provide a "guaranty deposit" of P150,000.00. Evidently convinced that respondent could help, complainant handed over and entrusted to respondent the amount of P144,000.00, as well as various documents, e.g., a special power of attorney, deed of sale, tax declaration and land title (in the name of complainant's father), required for the loan application. Respondent later told complainant that an additional amount of P109,000.00 was needed for withholding and documentary stamp taxes, plus surcharges. Complainant thereupon decided to forego the loan application. She demanded from respondent the return of her money; however, the latter not only failed to heed the request but also then began to avoid complainant.

Complainant finally sought assistance from the office of the Vice-President of the Philippines, which referred the matter to the National Bureau of Investigation ("NBI"). Respondent was subpoenaed twice by the agent-on-case but she failed in both instances to appear. The investigation, nonetheless, went through; thereafter, the NBI recommended that respondent be criminally charged with estafa under Article 315, paragraph 1(b), of the Revised Penal Code and that disbarment proceedings be taken against her. In a letter-referral, dated 03 May 1993, then NBI Director Epimaco A. Velasco transmitted to the Commission on Bar Discipline ("Commission") of the Integrated Bar of the Philippines ("IBP") the Bureau's evaluation.

The Commission required respondent to respond to the charges but respondent neither complied nor appeared at any of the hearings scheduled by it.

In the course of its proceedings, the Commission noted several criminal charges filed against respondent; viz:

(1) Criminal Case No. 92-8849 for Falsification of Private Document, pending before the Regional Trial Court of Antipolo, Branch 73;

(2) Criminal Case No. 93-9289 for Estafa under Article 315, par. 1(b) of the Revised Penal Code, pending before the Regional Trial Court of Antipolo, Branch 72;

(3) Criminal Case No. 93-118159 for Estafa through Falsification of Public Document filed with the Regional Trial Court of Manila, Branch 15, which resulted in her conviction. The dispositive portion of the decision, dated 24 March 1994, read:

WHEREFORE, this Court finds the accused GUILTY beyond reasonable doubt of the complex crime of Estafa thru falsification of public document and hereby imposes upon said accused an indeterminate penalty of 2 years 4 months of prision correccional as minimum to 20 years of reclusion temporal as maximum and indemnify the offended party the sum of P136,000.00 and to pay the cost. 1

(4) Criminal Cases Nos. 8015 and 8019 for Violation of Section 3(c), Republic Act No. 3019, pending before the Second Division of the Sandiganbayan;

(5) Criminal Cases Nos. 7351 and 7354 also for Violation of Section 3(c), Republic Act No. 3019, pending before the Second Division of the Sandiganbayan;

(6) Criminal Case No. 7036 for Violation of Section 3(c), Republic Act No. 3019, pending before the Second Division of the Sandiganbayan; and

(7) Criminal Case No. 6731 for Violation of Section 3(c), Republic Act No. 3019, pending before the Second Division of the Sandiganbayan.

In the Commission's Report and Recommendation, dated 25 July 1994, Investigating Commissioner Victor C. Fernandez recommended that "the respondent be disbarred for being totally unfit to be a member of the legal profession." 2 In its Resolution No. XI-94-219, dated 14 January 1995, the Board of Governors of the Integrated Bar of the Philippines ("IBP") resolved to adopt and approve the report of the Investigating Commissioner.

We also agree.

Well-settled is the rule that good moral character is not only a condition precedent to an admission to the legal profession but it must also remain extant in order to maintain one's good standing in that exclusive and honored fraternity. 3 The Code of Professional Responsibility mandates:

CANON 1 — . . . .

Rule 1.01 — A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.

CANON 16 — A lawyer shall hold in trust all moneys and properties of his client that may come into his possession.

Rule 16.01 — A lawyer shall account for all money or property collected or received for or from the client.

Despite all the opportunities accorded to her, respondent has failed to present her defense and to refute the charges or, at the very least, to explain herself. The Court is thus left with hardly any choice other than to accept the findings and recommendations of the Integrated Bar of the Philippines and the Commission on Bar Discipline.

WHEREFORE, respondent Teresita Sta. Ana is DISBARRED. The Clerk of Court is directed to strike out her name from the Roll of Attorneys.SO ORDERED.

A.C. No. 2597 March 12, 1998GLORITO V. MATURAN, petitioner, vs.ATTY. CONRADO S. GONZALES, respondent.R E S O L U T I O N

ROMERO, J.:

A complaint for disbarment was filed with this Court on October 25, 1983, by Glorito V. Maturan against his counsel, Atty. Conrado S. Gonzales, charging him with immoral, unethical, and anomalous acts. The respondent filed his comment thereto on February 6, 1984. On November 11, 1997, or after thirteen (13) years, the Board of Governors of the Integrated Bar of the Philippines submitted their report and recommendation on the instant case.

The facts, as culled from the records, are as follows:

Spouses Antonio and Gloria Casquejo instituted their son-in-law, Glorito V. Maturan (herein petitioner), as their attorney-in-fact, through a Special Power of Attorney (SPA) dated November 6, 1981. Said SPA authorized Maturan to file ejectment cases against squatters occupying Lot 1350-A, Psd-50375, located in General Santos City, as well as criminal cases against the latter for violation of P.D. 772, again in connection with said lot. Respondent, Atty. Conrado Gonzales, prepared and notarized said Special Power of Attorney.

Subsequently, Glorito Maturan engaged the services of respondent in ejecting several squatters occupying Lot 1350-A, Psd-50735. While said lot was registered in the name of Celestino Yokingco, Antonio Casquejo had, however, instituted a case for reconveyance of property and declaration of nullity against the former, docketed as Civil Case No. 2067.

As a consequence of his engagement by petitioner, respondent Gonzales filed Civil Case No. 1783-11 for Forcible Entry and Damages against several individuals. On February 18, 1983, a judgment was rendered in favor of petitioner. Petitioner, through respondent, filed a motion for issuance of a writ of execution on March 10, 1983.

In the interim, the parties to Civil Case No. 2067 entered into a compromise agreement, which was judicially approved in a judgment dated March 28, 1983.

On June 22, 1983, while the motion for issuance of a writ of execution was pending, and without withdrawing as counsel for petitioner, respondent filed, on behalf of Celestino Yokingco, et al., Civil Case No. 2746, an action to annul the judgment rendered in Civil Case No. 2067. The action was predicated on the lack of authority on the part of petitioner to represent Antonio and Gloria Casquejo, as no such authorization was shown to be on record in Civil Case No. 2067. On August 24, 1983, respondent, on behalf of Celestino Yokingco, et al., also filed Special Civil Case No. 161 for injunction with a prayer for preliminary injunction, with damages, against petitioner.

Aggrieved by respondent's acceptance of professional employment from their adversary in Civil Case No. 2067, and alleging that privileged matters relating to the land in question had been transmitted by petitioner to respondent in Civil Case 1783-11, petitioner filed an administrative complaint against the former for immoral, unethical, and anomalous acts and asked for his disbarment.

Respondent, in a comment dated January 25, 1984, denied having committed any malicious, unethical, unbecoming, immoral, or anomalous act against his client. Respondent declared that he was of the belief that filing a motion for issuance of a writ of execution was the last and final act in the lawyer-client relationship between himself and petitioner, and that his formal withdrawal as counsel for the Casquejos was unnecessary in order to sever the lawyer-client relationship between them. Furthermore, he alleged that his acceptance of employment from Yokingco was for him, an opportunity to honestly earn a little more for his children's sustenance.

The investigating commissioner of the Integrated Bar of the Philippines, in his report dated August 21, 1997, found respondent guilty of representing conflicting interests and recommended that he be suspended for three (3) years. The Board of Governors of the IBP adopted and approved the report and recommendation of the investigating commissioner but recommended that the suspension be reduced from three (3) years to one (1) year.

This Court adopts the findings of the investigating commissioner finding respondent guilty of representing conflicting interests. It is improper for a lawyer to appear as counsel for one party against the adverse party who is his client in a related suit, as a lawyer is prohibited from representing conflicting interests or discharging inconsistent duties. He may not, without being guilty of professional misconduct, act as counsel for a person whose interest conflicts with that of his present or former client. 1 That the representation of conflicting interest is in good faith and with honest intention on the part of the lawyer does not make the prohibition inoperative.

The reason for the prohibition is found in the relation of attorney and client, which is one of trust and confidence of the highest degree. A lawyer becomes familiar with all the facts connected with his client's case. He learns from his client the weak points of the action as well as the strong ones. Such knowledge must be considered sacred and guarded with care. No opportunity must be given him to take advantage of the client's secrets. A lawyer must have the fullest confidence of his client. For if the confidence is abused, the profession will suffer by the loss thereof. 2

This Court finds respondent's actuations violative of Canon 6 of the Canons of Professional Ethics which provide in part:

It is unprofessional to represent conflicting interests, except by express consent of all concerned given after a full disclosure of the facts. Within the meaning of this canon, a lawyer represents conflicting interests when, in behalf of one client, it is his duty to contend for that which duty to another client requires him to oppose.

Moreover, respondent's justification for his actions reveal a patent ignorance of the fiduciary obligations which a lawyer owes to his client. A lawyer-client relationship is not terminated by the filing of a motion for a writ of execution. His acceptance of a case implies that he will prosecute the case to its conclusion. He may not be permitted to unilaterally terminate the same to the prejudice of his client.

As to the recommendation that the term of suspension be reduced from three years to one year, we find the same to be unwarranted. In similar cases decided by the Supreme Court, the penalty of two or three years suspension has been imposed where respondent was found guilty of representing conflicting interests. In Vda. De Alisbo vs.Jalandoon, Sr., 3 the respondent, who appeared for complainant in a case for revival of judgment, even though he had been the counsel of the adverse party in the case sought to be revived, was suspended for a period of two years. In Bautista vs.Barrios, 4 a suspension of two years was imposed on respondent Barrios, who had drafted a deed of partition for petitioner, but who appeared for the other party therein, when the same was sought to be enforced by petitioner. In PNB vs. Cedo, 5 the Court even suspended the respondent therein for three years, but only because respondent not only represented conflicting interests, but also deliberately intended to attract clients with interests adverse to his former employer. Finally, in Natan vs.Capule, 6 respondent was suspended for two years after he accepted professional employment in the very case in which his former client was the adverse party.

ACCORDINGLY, this Court resolves to MODIFY the IBP recommendation to suspend respondent for one year and modifies it to SUSPENSION from the practice of law for TWO (2) YEARS, effective immediately.

SO ORDERED.

G.R. No. 76232 January 18, 1991VILL TRANSPORT SERVICE, INC., petitioner, vs.HON. COURT OF APPEALS, THE ENERGY CORPORATION, and the DEPUTY SHERIFF of the Regional Trial Court, Makati, Metro Manila, respondents.Romualdo M. Jubay for petitioner.Castillo, Laman, Tan & Pantaleon for private respondent. FERNAN, C.J.:p

The issue in this petition for review on certiorari is whether or not notice of a decision served upon counsel in a case who did not leave a forwarding address after he had moved from his address of record, is a valid service thereby making the decision final and executory after the lapse of the period to appeal.

The facts as found by the Court of Appeals are as follows:

In Civil Case No. 45167 before the Regional Trial Court of Makati, Branch CXLI, defendant Vill Transport Service, Inc. (Vill Transport for brevity) was held liable for damages for breach of contract in favor of the plaintiff Energy Corporation. Vill Transport was ordered to pay Energy Corporation US$25,524.75 or P191,435.62 as damages, P40,000 for charter fees, P33,931.65 for rental and maintenance costs and P63,750 for service fees, with all of these amounts being subject to 12% interest per annum from June 16, 1980, plus attorney's fees of P8,866.60.

On June 7, 1985 a copy of the decision was sent by registered mail to Atty. Amante Pimentel, counsel of record of Vill Transport, at his address at 563 Tanglaw Street, Mandaluyong, Metro Manila. However, it was returned to the court with the notation that the addressee had moved out of his given address without leaving a forwarding address.

On September 14, 1985, Energy Corporation moved for execution of the decision and on September 19, 1985, the court favorably acted on the motion. On September 24,1985, a writ of execution was therefore issued.

A month later, Vill Transport filed an urgent motion for reconsideration of the order of September 19, 1985 and served notice of its intention to appeal. It contended that the decision had not as yet become final because it came to know of the decision only on October 21, 1985. It also claimed that the writ of execution was void as no copy of the motion for execution was served on it.

Energy Corporation filed an opposition to said urgent motion pointing out that the decision had become final and executory since a copy of the decision was served on Vill transport through its counsel at his address of record and no appeal was perfected within the reglementary period of appeal. It added that a motion for execution of a final and executory judgment did not have to be with notice to defendant.

Before the motion for reconsideration could be resolved by the court, Vill Transport filed a motion for new trial based on newly-discovered evidence. Again, without waiting for the resolution of said motion, it filed with the Court of Appeals a petition for certiorari and mandamus with preliminary injunction aimed at the setting aside of the order of execution and the issuance of an order for a new trial.

On September 30, 1986, the Court of Appeals 1 rendered a decision dismissing the petition for lack of merit. 2 It held that petitioner's counsel was duty-bound to notify the trial court of any change of address and his failure to do so could not be excused. It added that the trial court had every reason to consider the service of its decision completed upon the expiration of five days from notice to counsel in the absence of prior notice by the latter of any change of address. It opined that "to hold that Rule 13, Sec. 8 cannot apply here because Atty. Pimentel did not get the notice, would be to encourage litigants or their attorneys to evade the service of judgments and orders by simply leaving their addresses without notice of their whereabouts." 3

Its motion for the reconsideration of said decision having been denied, Vill Transport interposed the instant petition for review on certiorari.

Petitioner admits the negligence of its counsel in not leaving a forwarding address but contends that its counsel was not actually notified of the registered letter containing a copy of the trial court's decision for he had moved from his address of record. Hence, service thereof could not have taken effect after the lapse of the five-day period mentioned in Rule 13, Section 8 of the Rules of Court. It invokes due process complaining that it was

deprived of its right to appeal from the decision of the lower court on account of its failure to receive a copy of the decision.

On the other hand, private respondent avers that the petition was prosecuted manifestly to delay execution of the decision of the lower court which had long become final and executory. It stresses the fact that, being designated by Section 2, Rule 13 of the Rules of Court to receive copies of all court processes, petitioner's counsel was duty-bound to inform the court of any changes in his address of record and therefore, should he fail to do so, service of such processes in his address of record should be considered complete and binding upon his client.

We find for the private respondent.

Section 8, Rule 13 of the Rules of Court provides that "(s)ervice by registered mail is complete upon actual receipt by the addressee; but if he fails to claim his mail from the post office within five (5) days from the date of first notice of the postmaster, service shall take effect at the expiration of such time." In Barrameda vs. Castillo, 4 the Court held that since the exception in service by registered mail refers to constructive service, not to actual receipt of the mail, it is but fair and just that there be conclusive proof that a first notice was sent by the postmaster to the addressee. While in the more recent case of De la Cruz vs. De la Cruz, 5 the Court appears to have adopted the more stringent rule of requiring not only that the notice of the registered mail be sent but that it should also be delivered to and received by the addressee, We find that this rule cannot be applied in this case wherein the element of negligence is present.

Petitioner herein disputes that a first notice was ever sent to its counsel of record because "the post office just returned the registered letter and put the stampmark . . . 'Moved'" thereon. 6 To our mind, petitioner's contention is sufficient proof that indeed a first notice was sent to its counsel of record. Its non-receipt by the addressee, however, was due entirely to his neglect in informing the court of the fact that he had moved and had a new address. To cater to petitioner's rhetorical argument would put a premium on negligence and encourage the non-termination of cases by reason thereof.

In Antonio vs. Court of Appeals, 7 the Court categorically stated that the requirement of conclusive proof of receipt of the registry notice "presupposes that the notice is sent to the correct address as indicated in the records of the court. It does not apply where, as in the case at bar, the notice was sent to the lawyer's given address but did not reach him because he had moved therefrom without informing the court of his new location. The service at the old address should be considered valid. Otherwise, no process can be served on the client through his lawyer if the latter has simply disappeared without leaving a forwarding address. There is no need to stress that service on the lawyer, if valid, is also valid service on the client he represents. The rule in fact is that it is on the lawyer and not the client that the service should first be made."

Losing a case on account of one's counsel's negligence is a bitter pill to swallow for the litigant. But then, the Court is duty-bound to observe its rules and procedures. And, in the observance thereof for the orderly administration of justice, it cannot countenance the negligence and ineptitude of lawyers who wantonly jeopardize the interests of their clients. 8 On his part, a lawyer shall observe the rules of procedure and shall not misuse them to defeat the ends of justice. 9

Thus, a lawyer should so arrange matters that official and judicial communications sent by mail will reach him promptly and should he fail to do so, not only he but his client as well, must suffer the consequence of his negligence. 10 Failure to claim registered mail of which notice had been duly given by the postmaster is not excusable negligence that would warrant the reopening of a decided case. 11 The same rule applies in cases like the instant one where the counsel, through his negligence, caused the nondelivery of a judicial notice.

WHEREFORE, the instant petition is hereby denied for lack of merit. This decision is immediately executory. Costs against the petitioner.SO ORDERED.

A.C. No. 4103 September 7, 1995VERONICA S. SANTIAGO, BENJAMIN Q. HONTIVEROS, MR. SOCORRO F. MANAS, and TRINIDAD NORDISTA, complainants, vs.ATTY. AMADO R. FOJAS, respondent. DAVIDE JR., J.:

In their letter of 8 September 1993, the complainants, former clients of the respondent, pray that the latter be disbarred for "malpractice, neglect and other offenses which may be discovered during the actual investigation of this complaint." They attached thereto an Affidavit of Merit wherein they specifically allege:

1. That we are Defendants-Appellates [sic] in the Court of Appeals Case No. CA-G.N. CV No. 38153 of which to our surprise lost unnecessarily the aforesaid Petition [sic]. A close perusal of the case reveals the serious misconduct of our attorney on record, Atty. Amado Fojas tantamount to malpractice and negligence in the performance of his duty obligation to us, to defend us in the aforesaid case. That the said attorney without informing us the reason why and riding high on the trust and confidence we repose on him either abandoned, failed to act accordingly, or seriously neglected to answer the civil complaint against us in the sala of Judge Teresita Capulong Case No. 3526-V-91 Val. Metro Manila so that we were deduced [sic] in default.

2. That under false pretenses Atty. Fojas assured us that everything was in order. That he had already answered the complaint so that in spite of the incessant demand for him to give us a copy he continued to deny same to us. Only to disclose later that he never answered it after all because according to him he was a very busy man. Please refer to Court of Appeals decision dated August 17, 1993.

3. That because of Atty. Amado Foja's neglect and malpractice of law we lost the Judge Capulong case and our appeal to the Court of Appeals. So that it is only proper that Atty. Fojas be disciplined and disbarred in the practice of his profession.

In his Comment, the respondent admits his "mistake" in failing to file the complainants' answer in Civil Case No. 3526-V-91, but he alleges that it was cured by his filing of a motion for reconsideration, which was unfortunately denied by the court. He asserts that Civil Case No. 3526-V-91 was a "losing cause" for the complainants because it was based on the expulsion of the plaintiff therein from the Far Eastern University Faculty Association (FEUFA) which was declared unlawful in the final decision in NCR-OD-M-90-10-050. Thus, "[t]he unfavorable judgment in the Regional Trial Court is not imputable to [his] mistake but rather imputable to the merits of the case, i.e., the decision in the Expulsion case wherein defendants (complainants herein) illegally removed from the union (FEUFA) membership Mr. Paulino Salvador. . . ." He further claims that the complainants filed this case to harass him because he refused to share his attorney's fees in the main labor case he had handled for them. The respondent then prays for the dismissal of this complaint for utter lack of merit, since his failure to file the answer was cured and, even granting for the sake of argument that such failure amounted to negligence, it cannot warrant his disbarment or suspension from the practice of the law profession.

The complainants filed a Reply to the respondent's Comment.

Issues having been joined, we required the parties to inform us whether they were willing to submit this case for decision on the basis of the pleadings they have filed. In their separate compliance, both manifested in the affirmative.

The facts in this case are not disputed.

Complainants Veronica Santiago, Benjamin Hontiveros, Ma. Socorro Manas, and Trinidad Nordista were the President, Vice-President, Treasurer, and Auditor, respectively, of the FEUFA. They allegedly expelled from the union Paulino Salvador. The latter then commenced with the Department of Labor and Employment (DOLE) a complaint (NCR-OD-M-90-10-050) to declare illegal his expulsion from the union.

In his resolution of 22 November 1990, Med-Arbiter Tomas Falconitin declared illegal Salvador's expulsion and directed the union and all its officers to reinstate Salvador's name in the roll of union members with all the rights and privileges appurtenant thereto. This resolution was affirmed in toto by the Secretary of Labor and Employment.

Subsequently, Paulino Salvador filed with the Regional Trial Court (RTC) of Valenzuela, Metro Manila, Branch 172, a complaint against the complainants herein for actual, moral, and exemplary damages and attorney's fees, under Articles 19, 20, and 21 of the Civil Code. The case was docketed as Civil Case No. 3526-V-91.

As the complainants' counsel, the respondent filed a motion to dismiss the said case on grounds of (1) res judicataby virtue of the final decision of the Med-Arbiter in NCR-OD-M-90-10-050 and (2) lack of jurisdiction, since what was involved was an intra-union issue cognizable by the DOLE. Later, he filed a supplemental motion to dismiss.

The trial court, per Judge Teresita Dizon-Capulong, granted the motion and ordered the dismissal of the case. Upon Salvador's motion for reconsideration, however, it reconsidered the order of dismissal, reinstated the case, and required the complainants herein to file their answer within a nonextendible period of fifteen days from notice.

Instead of filing an answer, the respondent filed a motion for reconsideration and dismissal of the case. This motion having been denied, the respondent filed with this Court a petition for certiorari, which was later referred to the Court of Appeals and docketed therein as CA-G.R. SP No. 25834.

Although that petition and his subsequent motion for reconsideration were both denied, the respondent still did not file the complainants' answer in Civil Case No. 3526-V-91. Hence, upon plaintiff Salvador's motion, the complainants were declared in default, and Salvador was authorized to present his evidence ex-parte.

The respondent then filed a motion to set aside the order of default and to stop the ex-parte reception of evidence before the Clerk of Court, but to no avail.

Thereafter, the trial court rendered a decision ordering the complainants herein to pay, jointly and severally, plaintiff Salvador the amounts of P200,000.00 as moral damages; P50,000.00 as exemplary damages or corrective damages; and P65,000.00 as attorney's fees; plus cost of suit.

The complainants, still assisted by the respondent, elevated the case to the Court of Appeals, which, however, affirmed in toto the decision of the trial court.

The respondent asserts that he was about to appeal the said decision to this Court, but his services as counsel for the complainants and for the union were illegally and unilaterally terminated by complainant Veronica Santiago.

The core issue that presents itself is whether the respondent committed culpable negligence, as would warrant disciplinary action, in failing to file for the complainants an answer in Civil Case No. 3526-V-91 for which reason the latter were declared in default and judgment was rendered against them on the basis of the plaintiff's evidence, which was received ex-parte.

It is axiomatic that no lawyer is obliged to act either as adviser or advocate for every person who may wish to become his client. He has the right to decline employment, 1 subject, however, to Canon 14 of the Code of

Professional Responsibility. Once he agrees to take up the cause of a client, the lawyer owes fidelity to such cause and must always be mindful of the trust and confidence reposed in him. 2 He must serve the client with competence and diligence, 3 and champion the latter's cause with wholehearted fidelity, care, and devotion. 4 Elsewise stated, he owes entire devotion to the interest of the client, warm zeal in the maintenance and defense of his client's rights, and the exertion of his utmost learning and ability to the end that nothing be taken or withheld from his client, save by the rules of law, legally applied. 5 This simply means that his client is entitled to the benefit of any and every remedy and defense that is authorized by the law of the land and he may expect his lawyer to assert every such remedy or defense. 6 If much is demanded from an attorney, it is because the entrusted privilege to practice law carries with it the correlative duties not only to the client but also to the court, to the bar, and to the public. A lawyer who performs his duty with diligence and candor not only protects the interest of his client; he also serves the ends of justice, does honor to the bar, and helps maintain the respect of the community to the legal profession. 7

The respondent admits that it was his duty to file an answer in Civil Case No. 3526-V-91. He justifies his failure to do so in this wise:

[I]n his overzealousness to question the Denial Order of the trial court, 8 [he] instead, thru honest mistake and excusable neglect, filed a PETITION FOR CERTIORARI with the Honorable Court, docketed as G.R. No. 100983. . . .

And, when the Court of Appeals, to which G.R. No. 100983 was referred, dismissed the petition, he again "inadvertently" failed to file an answer "[d]ue to honest mistake and because of his overzealousness as stated earlier. . . . "

In their Reply, the complainants allege that his failure to file an answer was not an honest mistake but was "deliberate, malicious and calculated to place them on the legal disadvantage, to their damage and prejudice" for, as admitted by him in his motion to set aside the order of default, his failure to do so was "due to volume and pressure of legal work." 9 In short, the complainants want to impress upon this Court that the respondent has given inconsistent reasons to justify his failure to file an answer.

We agree with the complainants. In his motion for reconsideration of the default order, the respondent explained his non-filing of the required answer by impliedly invoking forgetfulness occasioned by a large volume and pressure of legal work, while in his Comment in this case he attributes it to honest mistake and excusable neglect due to his overzealousness to question the denial order of the trial court.

Certainly, "overzealousness" on the one hand and "volume and pressure of legal work" on the other are two distinct and separate causes or grounds. The first presupposes the respondent's full and continuing awareness of his duty to file an answer which, nevertheless, he subordinated to his conviction that the trial court had committed a reversible error or grave abuse of discretion in issuing an order reconsidering its previous order of dismissal of Salvador's complaint and in denying the motion to reconsider the said order. The second ground is purely based on forgetfulness because of his other commitments.

Whether it be the first or the second ground, the fact remains that the respondent did not comply with his duty to file an answer in Civil Case No. 3526-V-91. His lack of diligence was compounded by his erroneous belief that the trial court committed such error or grave abuse of discretion and by his continued refusal to file an answer even after he received the Court of Appeals' decision in the certiorari case. There is no showing whatsoever that he further assailed the said decision before this Court in a petition for review under Rule 45 of the Rules of Court to prove his claim of overzealousness to challenge the trial court's order. Neither was it shown that he alleged in his motion to lift the order of default that the complainants had a meritorious defense. 10 And, in his appeal from the judgment by default, he did not even raise as one of the errors of the trial court either the impropriety of the order

of default or the court's grave abuse of discretion in denying his motion to lift that order.

Pressure and large volume of legal work provide no excuse for the respondent's inability to exercise due diligence in the performance of his duty to file an answer. Every case a lawyer accepts deserves his full attention, diligence, skill, and competence, regardless of its importance and whether he accepts it for a fee or for free.

All told, the respondent committed a breach of Canon 18 of the Code of Professional Responsibility which requires him to serve his clients, the complainants herein, with diligence and, more specifically, Rule 18.03 thereof which provides: "A lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection therewith shall render him liable."

The respondent's negligence is not excused by his claim that Civil Case No. 3526-V-91 was in fact a "losing cause" for the complainants since the claims therein for damages were based on the final decision of the Med-Arbiter declaring the complainants' act of expelling Salvador from the union to be illegal. This claim is a mere afterthought which hardly persuades us. If indeed the respondent was so convinced of the futility of any defense therein, he should have seasonably informed the complainants thereof. Rule 15.05, Canon 15 of the Code of Professional Responsibility expressly provides:

A lawyer, when advising his client, shall give a candid and honest opinion on the merits and probable results of the client's case, neither overstating nor understanding the prospects of the case.

Then too, if he were unconvinced of any defense, we are unable to understand why he took all the trouble of filing a motion to dismiss on the grounds of res judicata and lack of jurisdiction and of questioning the adverse ruling thereon initially with this Court and then with the Court of Appeals, unless, of course, he meant all of these to simply delay the disposition of the civil case. Finally, the complainants were not entirely without any valid or justifiable defense. They could prove that the plaintiff was not entitled to all the damages sought by him or that if he were so, they could ask for a reduction of the amounts thereof.

We do not therefore hesitate to rule that the respondent is not free from any blame for the sad fate of the complainants. He is liable for inexcusable negligence.

WHEREFORE, ATTY. AMADO R. FOJAS is hereby REPRIMANDED and ADMONISHED to be, henceforth, more careful in the performance of his duty to his clients.

SO ORDERED.

A.C. No. 3923. March 30, 1993.CONCORDIA B. GARCIA, complainant, vs. ATTY. CRISANTO L. FRANCISCO, respondent.

SYLLABUS1. LEGAL ETHICS; MISCONDUCT OF COUNSEL; VIOLATION OF OATH NOT DELAY ANY MAN OR MONEY OR MALICE; SUSPENSION FOR ONE YEAR FROM PRACTICE OF LAW FOR GROSS ABUSE OF RIGHT OF RECOURSE TO THE COURTS BY ARGUING A CAUSE THAT IS OBVIOUSLY WITHOUT MERIT. — The cause of the respondent's client is obviously without merit. The respondent was aware of this fact when he wilfully resorted to the gambits summarized above, continuously seeking relief that was consistently denied, as he should have expected . . . By grossly abusing his right of recourse to the courts for the purpose of arguing a cause that had been repeatedly rebuffed, he was disdaining the obligation of the lawyer to maintain only such actions or proceedings as appear to him to be just and such defenses only as he believes to be honestly debatable under the law. By violating his oath not to delay any man for money or malice, he has besmirched the name of an

honorable profession and has proved himself unworthy of the trust reposed in him by law as an officer of the Court . . . For this serious transgression of the Code of Professional Responsibility, he deserves to be sanctioned, not only as a punishment for his misconduct but also as a warning to other lawyers who may be influenced by his example. Accordingly, he is hereby SUSPENDED for ONE YEAR from the practice of law and from the enjoyment of all the rights and privileges appurtenant to membership of the Philippine bar.

R E S O L U T I O N

PER CURIAM, p:

In a sworn complaint filed with the Court on October 6, 1992, Concordia B. Garcia seeks the disbarment of Atty. Crisanto L. Francisco.

On March 9, 1964, Concordia B. Garcia and her husband Godofredo, the Dionisio spouses, and Felisa and Magdalena Baetiong leashed a parcel of land to Sotero Baluyot Lee for a period of 25 years beginning May 1, 1964. Despite repeated verbal and written demands, Lee refused to vacate after the expiration of the lease. Lee claimed that he had an option to extend the lease for another 5 years and the right of pre-emption over the property.

In this disbarment case, the complainant claims that Lee's counsel, respondent Francisco, commenced various suits before different courts to thwart Garcia's right to regain her property and that all these proceedings were decided against Lee. The proceedings stemmed from the said lease contract and involved the same issues and parties, thus violating the proscription against forum-shopping.

Respondent, in his comment, says that he inserted in defense of his client's right only such remedies as were authorized by law.

The tangle of recourses employed by Francisco is narrated as follows:

1. On March 29, 1989, Lee, through Francisco, filed a complaint against Garcia and the other lessors for specific performance and reconveyance with damages in the Regional Trial Court of Quezon City. This was docketed as Civil Case No. Q-89-2118. On June 9, 1989, Garcia filed a motion to dismiss the complaint on the grounds of failure to state a cause of action, laches and prescription. The case was dismissed by Judge Felimon Mendoza on August 10, 1989.

2. On May 29, 1989, Garcia and the other lessors filed a complaint for unlawful detainer against Lee in the Metropolitan Trial Court of Quezon City. This was docketed as Civil Case No. 1455. Through Francisco, Lee filed an answer alleging as special and affirmative defense the pendency of Civil Case no. Q-89-2118 in the Regional Trial Court of Quezon City. On September 5, 1989, Judge Marcelino Bautista issued a resolution rejecting this allegation on the ground that the issues before the two courts were separate and different.

3. On October 24, 1989, Lee, through Francisco, filed with the Regional Trial Court of Quezon City a petition for certiorari and prohibition with preliminary injunction against Judge Bautista, Garcia and the other lessors. This was docketed as civil Case No. Q-89-3833. In filing this petition, Francisco knew or should have known that it violated the Rule on Summary Procedure prohibiting the filing of petitions for certiorari, mandamus or prohibition against any interlocutory order issued by the court.

Francisco claims that what he appealed to the Regional Trial Court in Civil Case No. Q-89-3833 was the denial of his prayer for dismissal of Civil Case No. 1455. This is not true. Civil Case Q-89-3833 was clearly a special civil action and not an appeal.

On November 13, 1989, Judge Abraham Vera issued an order enjoining Judge Bautista from proceeding with the trial of the unlawful detainer case. Upon

motion of the complainant, however, the injunction was set aside and Civil Case No. Q-89-3833 was dismissed on January 9, 1990. Lee did not appeal.

4. On April 6, 1990, Lee through Francisco, filed a petition for certiorari and prohibition with prayer for preliminary injunction with the Court of Appeals against Judge Vera, Judge Singzon, Garcia and the other lessors. Docketed as CA G.R. Sp No. 20476, the petition assailed the January 9, 1990 order of Judge Vera dismissing Civil Case No. Q-89-3833. On May 31, 1989, the petition was denied.

5. On June 14, 1990, Judge Singzon decided Civil Case no. 1455 in favor of complainant Garcia and the other lessors. Lee did not appeal. Instead, on, June 21, 1990, through Francisco again, he filed a petition against Judge Singzon and the other lessors for certiorari and annulment of the decision in Civil Case No. 1455 and damages with prayer for issuance of preliminary injunction. This was docketed as Civil case No. 90-5852 in the Regional Trial Court of Quezon City, Branch 98, presided by Judge Cesar C. Paralejo.

In Francisco's comment before us, he alleges that Civil Case No. Q-90-5852 is an appeal from the unlawful detainer case. Again, he lies. Civil Case No. Q-90-5852 was a specified civil action and not an appeal.

On July 2, 1990, Garcia's group filed an Omnibus Motion to Dismiss Civil Case No. 90-5852. On July 13, 1990, Judge Paralejo issued an order enjoining Judge Singzon from enforcing the decision in that case. Garcia attacked this order in a petition for certiorari and prohibition with prayer for preliminary injunction docketed as CA Sp. No. 22392. The petition was granted by the Court of Appeals on September 19, 1991, on the ground that the judgment in the unlawful detainer case had come final and executory as June 30, 1990.

6. On September 24, 1991, Garcia filed a motion for execution in the unlawful detainer case. On September 27, 1991, Lee, through Francisco, filed a motion to inhibit Judge Singzon and to defer the hearing of the motion. A writ of execution was nonetheless issued by Judge Singzon on October 8, 1991.

7. Two days later, Lee, through Francisco, filed with the Supreme Court a petition for certiorari with preliminary injunction and temporary restraining order against the Court of Appeals, Judge Singzon, Garcia and the other lessors. This Court denied the petition on January 27, 1992, and reconsideration on April 8, 1992.

8. Finally, Lee, still through Francisco, filed a petition for certiorari with preliminary injunction against Judge Singzon, Garcia and the other lessors in the Regional Trial Court of Quezon City to set aside and declare the writs of execution in Civil Case No. 1455. This was dismissed on August 4, 1992, and Lee, through Francisco, filed a motion for reconsideration. According to Francisco, he was relieved as counsel while this motion was pending.

A lawyer owes fidelity to the cause of his client but not at the expense of truth and the administration of justice.

The cause of the respondent's client in obviously without merit. The respondent was aware of this fact when he wilfully resorted to the gambits summarized above, continuously seeking relief that was consistently denied, as he should have expected. He thereby added to the already clogged dockets of the courts and wasted their valuable time. He also caused much inconvenience and expense to the complainant, who was obliged to defend herself against his every move.

By grossly abusing his right of recourse to the courts for the purpose of arguing a cause that had been repeatedly rebuffed, he was disdaining the obligation of the lawyer to maintain only such actions or proceedings as appear to him to be just and such defense only as he believes to be honestly debatable under the law. By violating his oath not to delay any man for money or malice, he has besmirched the name of an honorable profession and has proved himself unworthy of trust reposed in him by law as an officer of the Court.

Atty. Crisanto l. Francisco took his oath as a lawyer on March 2, 1956. Considering his age and experience in the practice of the laws, he should have known better than to trifle with it and to use it as an instrument for harassment of the complainant and the misuse of judicial processes. For this serious transgression of the Code of Professional Responsibility, he deserves to be sanctioned, not only as punishment for his misconduct but also as a warning to other lawyers who may be influenced by his example.

Accordingly, he is hereby SUSPENDED for ONE YEAR from the practice of law and from the enjoyment of all the rights and privileges appurtenant to membership in the Philippine bar.

Let a copy of this Resolution be served immediately on the respondent and circularized to all courts and the Integrated Bar of the Philippines.

SO ORDERED.

G.R. No. 98149 September 26, 1994JOSE V. DEL ROSARIO, petitioner, vs.HON. COURT OF APPEALS and DE DIOS MARIKINA TRANSPORTATION CO., INC., respondents.Ponce Enrile, Cayetano, Reyes & Manalastas for petitioner.Orlando B. Braga for private respondent. VITUG, J.:

Petitioner suffered physical injuries, requiring two (2) major operations, when he fell from, and then was dragged along the asphalted road by, a passenger bus operated by private respondent transportation company. The incident occurred when the bus driver bolted forward at high speed while petitioner was still clinging on the bus door's handle bar that caused the latter to lose his grip and balance. The refusal of private respondent to settled petitioner's claim for damages constrained petitioner to file, on 26 June 1985, a complaint for damages against private respondent.

After the reception of evidence, the trial court, on 11 December 1989, rendered its decision, the dispositive portion reading thusly:

WHEREFORE, judgment is hereby rendered dismissing defendant De Dios Marikina Transportation Co., Inc.'s counterclaim for lack of merit and ordering said defendant to pay plaintiff Jose V. Del Rosario: (a) the sum of P76,944.41, as actual and compensatory damages; (b) the sum of P15,000.00, as moral and exemplary damages; and (c) the sum of P33,641.50, as attorney's fees, a s well as to pay the costs of suit; and, as regards the third-party complaint herein, ordering third-party defendant First Quezon City Insurance Co., Inc. to indemnify third-party plaintiffDe Dios Marikina Transportation Co., Inc. in the sum of P12,000.00, with interest thereon at the legal rate from date of filing of the third-party complaint on August 20, 1985, until full payment thereof. Further, there being no satisfactory warrant, therefor, the Court hereby dismisses the rest of the claims in the complaint and third-party complaint herein.

IT IS SO ORDERED.

On appeal to it, the Court of Appeals affirmed in toto the findings of fact of the trial court, as well as the grant to petitioner of damages, but it reduced the award for attorney's fees from P33,641.50 to P5,000.00. Petitioner's motion for reconsideration questioning the reduction of attorney's fees was denied by the appellate court. Hence, this petition raising this sole issue.

We see merit in the petition.

There is no question that a court may, whenever it deems it just and equitable, allow the recovery by the prevailing party of attorneys fees. 1 In determining the reasonableness of such fees, this Court in a number of cases 2 has provided various criteria which, for convenient guidance, we might collate thusly:

a) the quantity and character of the services rendered;b) the labor, time and trouble involved;c) the nature and importance of the litigation;d) the amount of money or the value of the property affected by the controversy;e) the novelty and difficulty of questions involved;f) the responsibility imposed on counsel;g) the skill and experience called for in the performance of the service;h) the professional character and social standing of the lawyer;i) the customary charges of the bar for similar services;j) the character of employment, whether casual or for establishment client;k) whether the fee is absolute or contingent (it being the rule that an attorney may properly charge a higher fee when it is contingent than when it is absolute); and1) the results secured.

In this instance, the complaint for damages was instituted by petitioner in June 1985, following the refusal of private respondent to settle petitioner's claim, and the decision thereon was promulgated by the court a quo only in December 1989 or about four years and six months later. Several pleadings were filed and no less than twenty appearances were made by petitioner's counsel, not counting the various other pleadings ultimately filed with the Court of Appeals and now before this Court. Given the nature of the case, the amount of damages involved, and the evident effort exerted by petitioner's counsel, the trial court's award of attorney's fees for P33,641.50 would appear to us to be just and reasonable.

WHEREFORE, the instant petition is hereby GRANTED, and the decision of the Court of Appeals is MODIFIED by REINSTATING the trial court's award of attorney's fees.

SO ORDERED

G.R. No. L-29184 January 30, 1989BENEDICTO LEVISTE, petitioner, vs.THE COURT OF APPEALS, HON. JUDGE LUIS B. REYES, COURT OF FIRST INSTANCE OF MANILA, ROSA DEL ROSARIO, RITA BANU, CARMEN DE GUZMAN-MARQUEZ, JESUS R. DE GUZMAN, RAMON R. DE GUZMAN, JACINTO R. DE GUZMAN and ANTONIO R. DE GUZMAN, respondents.Benedicto Leviste for and in his own behalf.Gatchalian, Ignacio & Associates for respondents de Guzman. GRIÑO-AQUINO, J.:

The issue in this case is whether or not an attorney who was engaged on a contingent fee basis may, in order to collect his fees, prosecute an appeal despite his client's refusal to appeal the decision of the trial court.

On September 7, 1963, the petitioner, a practicing attorney, entered into a written agreement with the private respondent Rosa del Rosario to appear as her counsel in a petition for probate of the holographic will of the late Maxima C. Reselva. Under the will, a piece of real property at Sales Street, Quiapo, Manila, was bequeathed to Del Rosario. It was agreed that petitioner's contigent fee would be thirty-five per cent (35%) of the property that Rosa may receive upon the probate of the will (Annex "A", p. 59, Rollo).

In accordance with their agreement, Leviste performed the following services as Del Rosario's counsel:

(1) Thoroughly researched and studied the law on probate and succession;(2) Looked for and interviewed witnesses, and took their affidavits;(3) Filed the petition for. probate is Special Proceeding No. 58325;(4) Made the proper publications;(5) Presented at the trial the following witnesses:a) Eleuterio de Jesusb) Lucita de Jesus

c) Purita L. Llanesd) Rita Banue) Jesus Lulod.

On August 20, 1965, Leviste received a letter from Ms. Del Rosario, informing him that she was terminating his services as her counsel due to "conflicting interest." This consisted, according to the letter, in petitioner's moral obligation to protect the interest of his brother-in-law, Gaudencio M. Llanes, whom Del Rosario and the other parties in the probate proceeding intended to eject as lessee of the property which was bequeathed to Del Rosario under the will (Annex "B", p. 60, Rollo).

On September 20, 1965, petitioner filed a "Motion to Intervene to Protect His Rights to Fees for Professional Services." (Annex "B", p. 60, Rollo.)

In an order dated November 12, 1965 the trial court denied his motion on the ground that he had "not filed a claim for attorney's fees nor recorded his attorney's lien." (p. 3, Rollo.)

On November 23, 1965, petitioner filed a "Formal Statement of Claim for Attorney's Fees and Recording of Attorney's Lien,' which was noted in the court's order of December 20, 1965 (Annexes "D" and "E", pp. 63 & 64, Rollo).

Although the order denying his motion to intervene had become final, petitioner continued to receive copies of the court's orders, as well the pleadings of the other parties in the case. He also continued to file pleadings. The case was submitted for decision without the respondents' evidence.

On November 23, 1966, Del Rosario and Rita Banu, the special administratrix-legatee, filed a "Motion To Withdraw Petition for Probate" alleging that Del Rosario waived her rights to the devise in her favor and agreed that the De Guzman brothers and sisters who opposed her petition for probate, shall inherit all the properties left by the decedent. (Annex "F", p. 65, Rollo.)

In an order of April 13, 1967 the trial court denied the motion to withdraw the petition for being contrary to public policy (Annex "G", pp. 66-67, Rollo).

Nonetheless, on August 28, 1967, the court disallowed the will, holding that the legal requirements for its validity were not satisfied as only two witnesses testified that the will and the testatrix's signature were in the handwriting of Maxima Reselva.

The petitioner filed an appeal bond, notice of appeal, and record on appeal. The private respondents filed a motion to dismiss the appeal on the ground that petitioner was not a party in interest.

The petitioner opposed the motion to dismiss his appeal, claiming that he has a direct and material interest in the decision sought to be reviewed. He also asked that he be substituted as party-petitioner, in lieu of his former client, Ms. Del Rosario.

On March 28, 1968, the trial judge dismissed the appeal and denied petitioner's motion for substitution.

The petitioner filed in the Court of Appeals a petition for mandamus (CA-G.R. No. 41248) praying that the trial court be ordered to give due course to his appeal and to grant his motion for substitution.

On May 22, 1968, the Court of Appeals dismissed the petition for being insufficient in form and substance as the petitioner did not appear to be the proper party to appeal the decision in Special Proceeding No. 58325 (Annex 1, p. 77, Rollo).

Upon the denial of his motion for reconsideration, petitioner appealed by certiorari to this Court, assigning the following errors against the Court of Appeals' resolution:

1. The Court of Appeals erred in finding that the petitioner appears not to be the proper party to appeal the decision in Sp. Proc. No. 58325 of the Court of First Instance of Manila.

2. Assuming the petitioner's right of appeal is doubtful, the Court of Appeals erred in dismissing his petition for mandamus; and

3. The Court of Appeals erred in not reversing the decision in Sp. Proc. No. 58325 denying the probate of the holographic will of the late Maxima C. Reselva, said decision being patently erroneous.

Under his first assignment of error, petitioner argues that by virtue of his contract of services with Del Rosario, he is a creditor of the latter, and that under Article 1052 of the Civil Code which provides:

ART. 1052. If the heir repudiates the inheritance to the prejudice of his own creditors, the latter may petition the court to authorize them to accept it in the name of the heir.

The acceptance shall benefit the creditors only to an extent sufficient to cover the amount of their credits. The excess, should there be any, shall in no case pertain to the renouncer, but shall be adjudicated to the persons to whom, in accordance with the rules established in this Code, it may belong.

he has a right to accept for his client Del Rosario to the extent of 35% thereof the devise in her favor (which she in effect repudiated) to protect his contigent attorney's fees.

The argument is devoid of merit. Article 1052 of the Civil Code does not apply to this case. That legal provision protects the creditor of a repudiating heir. Petitioner is not a creditor of Rosa del Rosario. The payment of his fees is contingent and dependent upon the successful probate of the holographic will. Since the petition for probate was dismissed by the lower court, the contingency did not occur. Attorney Leviste is not entitled to his fee.

Furthermore, Article 1052 presupposes that the obligor is an heir. Rosa del Rosario is not a legal heir of the late Maxima C. Reselva. Upon the dismissal of her petition for probate of the decedent's will, she lost her right to inherit any part of the latter's estate. There is nothing for the petitioner to accept in her name.

This Court had ruled in the case of Recto vs. Harden, 100 Phil. 1427, that "the contract (for contingent attorney's fees) neither gives, nor purports to give, to the appellee (lawyer) any right whatsoever, personal or real, in and to her (Mrs. Harden's) aforesaid share in the conjugal partnership. The amount thereof is simply a basis for thecomputation of said fees."

The Court of Appeals did not err in dismissing the petition for mandamus, for while it is true that, as contended by the petitioner, public policy favors the probate of a will, it does not necessarily follow that every will that is presented for probate, should be allowed. The law lays down procedures which should be observed and requisites that should be satisfied before a will may be probated. Those procedures and requirements were not followed in this case resulting in the disallowance of the will. There being no valid will, the motion to withdraw the probate petition was inconsequential.

Petitioner was not a party to the probate proceeding in the lower court. He had no direct interest in the probate of the will. His only interest in the estate is an indirect interest as former counsel for a prospective heir. In Paras vs. Narciso, 35 Phil. 244, We had occassion to rule that one who is only indirectly interested in a will may not interfere in its probate. Thus:

... the reason for the rule excluding strangers from contesting the will, is not that thereby the court maybe prevented from learning facts which would justify or necessitate a denial of probate, but rather that the courts and the litigants should not be molested by the intervention in the proceedings of persons with no interest in

the estate which would entitle them to be heard with relation thereto. (Paras vs. Narciso, 35 Phil. 244, 246.)

Similary, in Morente vs. Firmalino, 40 O.G. 21st Supp. 1, We held:

We are of the opinion that the lower court did not err in holding that notice of an attorney's lien did not entitle the attorney-appellant to subrogate himself in lieu of his client. It only gives him the right to collect a certain amount for his services in case his client is awarded a certain sum by the court.

WHEREFORE, the petition for certiorari is denied for lack of merit. Costs against the petitioner.

SO ORDERED.

G.R. No. 117438 June 8, 1995RAUL SESBREÑO, petitioner, vs.HON, COURT OF APPEALS, and PATRICIA GIAN, SOTERO BRANZUELA, ANDRES C. YPIL, SANTIAGO BACAYO, BRIGIDO COHITMINGAO, VICTORINO DINOY, GUILLERMO MONTEJO and EMILIO RETUBADO,respondents. ROMERO, J.:

Of interest to all law practitioners is the issue at bench, namely, whether the Court of Appeals had the authority to reduce the amount of attorney's fees awarded to petitioner Atty. Raul H. Sesbreño, notwithstanding the contract for professional services signed by private respondents.

The antecedent facts of the case follow.

Fifty-two employees sued the Province of Cebu and then Governor Rene Espina for reinstatement and backwages. 1 Herein petitioner, Raul H. Sesbreño, replaced the employees' former counsel Atty. Catalino Pacquiao.

Thirty-two of the fifty-two employees signed two documents whereby the former agreed to pay petitioner 30% as attorney's fees and 20% as expenses to be taken from their back salaries.

On September 12, 1974, the trial court rendered a decision ordering the Province of Cebu to reinstate the petitioning employees and pay them back salaries. Said decision became final and executory after it was affirmedin toto by the Court of Appeals and the petition to review the appellate decision, denied by this Court in 1978. 2

A compromise agreement was entered into by the parties below in April 1979 whereby the former employees waived their right to reinstatement among others. Likewise, pursuant to said compromise agreement, the Province of Cebu released P2,300,000.00 to the petitioning employees through petitioner as "Partial Satisfaction of Judgment." The amount represented back salaries, terminal leave pay and gratuity pay due to the employees.

Sometime November and December 1979, ten employees, herein private respondents, 3 filed manifestations before the trial court asserting that they agreed to pay petitioner 40% to be taken only from their back salaries.

The lower court issued two orders, with which petitioner complied, requiring him to release P10,000.00 to each of the ten private respondents and to retain 40% of the back salaries pertaining to the latter out of the P2,300,000.00 released to him.

On March 28, 1980, the trial court fixed petitioner's attorney's fees at 40% of back salaries, terminal leave, gratuity pay and retirement benefits and 20% as expenses, or a total of 60% of all monies paid to the employees.

Private respondents' motion for reconsideration was granted and on June 10, 1980, the trial court modified the award after noting that petitioner's attorney's lien was inadvertently placed as 60% when it should have been only 50%. The dispositive portion of the order reads:

WHEREFORE, in view of all the foregoing the order of this Court fixing 60% as attorney's fee[s] of Atty. Sesbreño should be 50% of all monies which the petitioners (Suico, et al.) may receive from the Provincial Government.

Obviously not satisfied with the attorney's fees fixed by the trial court, petitioner appealed to the Court of Appeals claiming additional fees for legal services before the Supreme Court, reimbursement for expenses and a clear statement that the fee be likewise taken from retirement pay awarded to his clients. Unfortunately, the respondent appellate court did not agree with him as the generous award was further reduced. 4

The appellate court noted that in this jurisdiction, attorney 's fees are always subject to judicial control and deemed the award of 20% of the back salaries awarded to private respondents as a fair, equitable and reasonable amount of attorney's fee. The decretal portion of the decision reads:

WHEREFORE, the questioned order is MODIFIED. The attorney's fees due Atty. Raul Sesbreño is fixed at an amount equivalent to 20% of all back salaries which the Province of Cebu has awarded to herein 10 petitioners. 5

Hence this petition for review where he claims that attorney's fees amounting to 50% of all monies awarded to his clients as contingent fees should be upheld for being consistent with prevailing case law and the contract of professional services between the parties. He adds that since private respondents did not appeal, they are not entitled to affirmative relief other than that granted in the regional trial court.

We find no reversible error in the decision of the Court of Appeals and vote to deny the petition.

Respondent court found that the contract of professional services entered into by the parties 6 authorized petitioner to take a total of 50% from the employees' back salaries only. The trial court, however, fixed the lawyer's fee on the basis of all monies to be awarded to private respondents.

Fifty per cent of all monies which private respondents may receive from the provincial government, according to the Court of Appeals, is excessive and unconscionable, not to say, contrary to the contract of professional services. 7 After considering the facts and the nature of the case, as well as the length of time and effort exerted by petitioner, respondent court reduced the amount of attorney's fees due him.

It is a settled rule that what a lawyer may charge and receive as attorney's fees is always subject to judicial control.8 A lawyer is primarily an officer of the court charged with the duty of assisting the court in administering impartial justice between the parties. When he takes his oath, he submits himself to the authority of the court and subjects his professional fees to judicial control. 9

As stated by the Court in the case of Sumaong v. Judge: 10

A lawyer is not merely the defender of his client's cause and a trustee of his client in respect of the client's cause of action and assets; he is also, and first and foremost, an officer of the court and participates in the fundamental function of administering justice in society. It follows that a lawyer's compensation for professional services rendered are subject to the supervision of the court, not just to guarantee that the fees he charges and receives remain reasonable and commensurate with the services rendered, but also to maintain the dignity and integrity of the legal profession to which he belongs. Upon taking his attorney 's

oath as an officer of the court, a lawyer submits himself to the authority of the courts to regulate his right to professional fees. 11

In the case at bench, the parties entered into a contingent fee contract. The Agreement provides:

WE, the undersigned petitioners in the case of POLICRONIO BELACHO, ET AL., VS. RENE ESPINA ET AL., hereby agree to pay Atty. Sesbreño, our lawyer, the following to be taken from our back salaries:

30% as attorney's fees20% as expenses

That we enter into agreement in order to be paid our back salaries as early as possible and so that we may be reinstated as early as possible.

A stipulation on a lawyer's compensation in a written contract for professional services ordinarily controls the amount of fees that the contracting lawyer may be allowed, unless the court finds such stipulated amount unreasonable unconscionable. 12

A contingent fee arrangement is valid in this jurisdiction 13 and is generally recognized as valid and binding but must be laid down in an express contract. 14 The amount of contingent fees agreed upon by the parties is subject to the stipulation that counsel will be paid for his legal services only if the suit or litigation prospers. A much higher compensation is allowed as contingent fees in consideration of the risk that the lawyer may get nothing if the suit fails.

Contingent fee contracts are under the supervision and close scrutiny of the court in order that clients may be protected from unjust charges. 15 Its validity depends in large measure on the reasonableness of the stipulated fees under the circumstances of each case. 16

When the courts find that the stipulated amount is excessive or the contract is unreasonable or unconscionable, or found to have been marred by fraud, mistake, undue influence or suppression of facts on the part of the attorney, public policy demands that said contract be disregarded to protect the client from unreasonable exaction. 17

Stipulated attorney's fees are unconscionable whenever the amount is by far so disproportionate compared to the value of the services rendered as to amount to fraud perpetrated upon the client. This means to say that the amount of the fee contracted for, standing alone and unexplained would be sufficient to show that an unfair advantage had been taken of the client, or that a legal fraud had been perpetrated on him. 18

The decree of unconscionability or unreasonableness of a stipulated amount in a contingent fee contract, will not however, preclude recovery. It merely justifies the court's fixing a reasonable amount for the lawyer's services.

Courts may always ascertain, if the attorney's fees are found to be excessive, what is reasonable under the circumstances. Quantum meruit, meaning "as much as he deserves," is used as the basis for determining the lawyer's professional fees in the absence of a contract. Factors such as the time spent and extent of services rendered; novelty and difficulty of the questions involved; importance of the subject matter; skill demanded; probability of losing other employment as a result of acceptance of the proffered case; customary charges for similar services; amount involved in the controversy and the benefits resulting to the client; certainty of compensation; character of employment; and professional standing of the lawyer, are considered in determining his fees. 19

There is nothing irregular about the respondent court's finding that the 50% fee of petitioner is unconscionable As aptly put by the court:

It effectively deprives the appellees of a meaningful victory of the suit they have passionately pursued. Balancing the allocation of the monetary award, 50% of all monies to the lawyer and the other 50% to be allocated among all his 52 clients, is too lop-sided in favor of the lawyer. The ratio makes the practice of law a commercial venture, rather than a noble profession.

. . . Also, the 52 employees who are the plaintiffs in the aforementioned civil case were dismissed from employment, their means of livelihood. All 52 hired claimant-appellant as counsel so that they could be reinstated and their source of income restored. It would, verily be ironic if the counsel whom they had hired to help would appropriate for himself 50% or even 60% of the total amount collectible by these employees. Here is an instance where the courts should intervene. 20

Considering the nature of the case, which is a labor case, the amount recovered and petitioner's participation in the case, an award of 50% of back salaries of his 52 clients indeed strikes us as excessive. Under the circumstances, a fee of 20% of back salaries would be a fair settlement in this case. In any event, this award pertains only to the ten private respondents herein. Petitioner has already been compensated in the amount of 50% of all monies received, by the rest of his clients in the case below.

WHEREFORE, in view of the foregoing, the petition is DENIED and the appealed decision AFFIRMED.

SO ORDERED.

G.R. No. L-67970 January 15, 1988JOSE ABROGAR and JUANA DESEAR, petitioners, vs.INTERMEDIATE APPELLATE COURT, SOCORRO DESEAR and BRIGIDA DESEAR, respondents. SARMIENTO, J.:

This is a Petition for Review on certiorari of the Decision of the then Intermediate Appellate Court, 1 now Court of Appeals, affirming in toto the decision of the trial court which annulled a sheriff sale.

The petitioners and private respondents were judgment plaintiffs and defendants, respectively, in a civil case 2decided by the trial court and affirmed by the appellate court. For failure of the private respondents to satisfy a final and executory judgment in the said civil case amounting to P2,553.00 only, their two parcels of land with a combined market value of P75,000.00, were levied on execution and advertised for public sale by the Provincial Sheriff. 3 The auction sale was scheduled for March 27, 1971 but the same did not push through because the trial court, upon motion of private respondent Socorro Desear, issued an order on March 26, 1971, or one day before the date fixed, postponing the auction sale on condition that the publication fees would be paid by the movant. The movant did not pay as ordered. Instead of proceeding with the auction sale on March 27, 1971, considering that there was no valid postponement, the condition thereof not having been complied with, the Provincial Sheriff of Pangasinan nevertheless held the auction almost four months later, on July 16, 1971, when the two parcels of land were sold, for, as earlier stated, P2,553.00 only. Subsequently, a Sheriffs Certificate of Sale was issued. There was no showing that private respondent Socorro Desear agreed to the July 16, 1971 auction sale. However, it is indisputable that there was neither new notice nor new publication of the said auction sale. 4

The trial court ruled that the Sheriffs Final Sale was null and void for lack of notice and publication and awarded attorney's fees in the amount of P2,000.00 in favor of the private respondents. 5

Now before us, the petitioners assigned several errors of the respondent appellate court. We summarize these assigned errors into two, to wit: (1) in ruling that there was no valid postponement of the date of the auction sale originally set for March 27, 1971; and (2) in awarding attorney's fees of P2,000.00 in the absence of any prayer and legal bases therefor. 6

As correctly pointed out by the respondent court (and the trial court), the proper notice and publication in a newspaper was made for the sale at public auction scheduled for March 27, 1971. On motion, however, of private respondents, the trial court in an Order dated March 26, 1971, directed the sale set for March 27, 1971 postponed provided the movant would pay the publication fees, otherwise the public auction would continue at a date to be designated by the Sheriff. The movant did not pay the publication fees hence there was no postponement of the public auction sale since the condition precedent or suspensive condition (that of paying the publication fees) was not complied with. 7 There was therefore no valid postponement of the public auction sale. And there was no written consent of debtor and creditor and neither was there any agreement in writing by the parties authorizing the sheriff or the officer making the sale to adjourn the same "to any date agreed upon in writing by the parties." 8

The public auction sale set for March 27, 1971, should have been held considering that the said schedule complied with all the requirements of law regarding a public sale, including notice and publication. The officer may adjourn the sale from day to day if it is necessary to do so for lack of time to complete the sale on the date fixed in the notice. 9 But he may not adjourn to another date unless with the written consent of the parties. 10 This was precisely the point of the appellate court when it stressed the fact that there was no written agreement between the debtor and the creditor to postpone the sale, and in fact there was no sale held on the scheduled date 11 to warrant the application of Section 24, Rule 39 of the Revised Rules of Court.

Considering, therefore, that there was no valid postponement of the original date of the auction sale on March 27, 1971, "then the alleged public auction sale on July 16, 1971 or close to four months after the original date of sale on March 27, 1971 without the proper notice and publication is null and void" as correctly pointed out by the respondent court. 12

The second issue raised by the petitioners is meritorious.

There is neither an allegation nor evidence to support the award of P2,000.00 by way of attorney's fees in favor of private respondents. The complaint does not pray for attorney's fees. 13 Even the transcript of stenographic notes in the trial does not contain any testimony to support an award of attorney's fees. 14 As succinctly put, the claim for attorney's fees was neither pleaded nor proved !

The exercise of judicial discretion in the award of attorney's fees under Article 2208 (ii) of the New Civil Code demands a factual, legal, and equitable justification. Without such justification, the award is a conclusion without a premise, its basis being improperly left to speculation and conjecture. 15

Attorney's fees are recoverable not as a matter of right. 16 It is the import of Article 2208 that the award of attorney's fees is an exception and that the decision must contain an express finding of fact to bring the case within the exception and justify the grant of attorney's fees. "Just and equitable" under paragraph 11, Article 2208, New Civil Code is not a matter of feelings, but demonstration. 17 The reason for the award of attorney's fees must be stated in the text of the court's decision, otherwise, if it is stated only in the dispositive portion of the decision, the same must be disallowed on appeal. 18

In the light of all the foregoing, the award of attorney's fees in favor of the private respondents in the case before us has no basis. Hence, attorney's fees must be disallowed.

WHEREFORE, the Decision of the respondent court declaring null and void the public auction sale on July 16, 1971 for lack of notice and publication, is hereby AFFIRMED. However, the award of attorney's fees is REVERSED. Costs against petitioners.

This Decision is IMMEDIATELY EXECUTORY.

G.R. No. 97255 August 12, 1994SOLID HOMES, INC., petitioner, vs.HON. COURT OF APPEALS, INVESTCO, INC., ANGELA PEREZ STALEY, and ANTONIO PEREZ, respondents.Rene A. Diokno for petitioner.

R E S O L U T I O N

VITUG, J.:An action for collection of sums of money, damages and attorney's fees was filed with the Regional Trial Court (Civil Case No. 40615) of Pasig by private respondents Investco, Angela Perez Staley and Antonio Perez Jr. against petitioner Solid Homes, Inc.

Private respondents averred that, on 07 September 1976, they sold, under an agreement entitled "contract to sell and to buy," to Solid Homes six (6) parcels of land in Quezon City and Marikina, with an area of 704,443 sq.m., for a total selling price of P10,211,075.00 payable (in accordance with paragraph 1 thereof), as follows:

a) P100,000.00, Philippine Currency, as part down payment upon signing and execution of this contract receipt of which in full is hereby acknowledged;

b) P2,042,215.00, Philippine Currency, as down payment payable on the following dates:

1 July 22, 1977 — P400,000.002 October 22, 1977 — 711,107.503 January 22, 1978 — 711,107.50

It is hereby agreed that the above down payment included the first down payment of P199,000.00. Should the FIRST PARTY obtain titles to the properties above-described after July 22, 1977, the due dates of the down payment and all subsequent payments on the balance shall be adjusted accordingly.

c) The balance of P8,188,860.00 shall be payable in ten (10) semi-annual installments for a period of five (5) years and shall earn interest at the rate of twelve (12%) per annum, the first installment to be due on July 22, 1978. The installment due together with the Schedule of Payments attached hereto as Schedule "A" and made an integral part of this contract (Exh. A). 1

The second paragraph of Exhibit "A" stipulated that should Solid Homes fail to pay any of the installments on their respective due dates, an interest of one percent (1%) per month on the defaulted amount would be paid for up to two months or pro-rata thereof; thereafter, should the installment due, as well as the interest thereon, still remain unpaid, the entire balance of the purchase price would then become immediately due and demandable. Such due and demandable sum would be payable within thirty (30) days, counted from the expiration of the 2-month period, without further need for judicial action.

Private respondents asserted that Solid Homes violated the terms of the agreement by refusing to pay the balance of P4,800,282.91 and by failing to negotiate a settlement with the tenants and squatters of the property despite its receipt from Investco of P350,000.00 for that specific purpose.

The trial court rendered judgment on 14 February 1985; the dispositive portion read:

WHEREFORE, judgment is hereby rendered ordering the defendant to pay the plaintiffs:

1) The amount of P4,800,282.91 with interest thereof at the rate of one percent per month from February 23, 1981, until fully paid;

2) The amount of P99,559.00 representing cost of science and transfer taxes which defendant credited to its account with interest at the legal rate from the filing of the complaint;

3) The amount of P250,000.00 to cover attorney's fees and litigation expenses. 2

On appeal, the Court of Appeals (CA-G.R. CV No. 13400), modified the trial court's judgment and rendered its own decision, dated 21 January 1991, resolving thusly:

PREMISES CONSIDERED, the judgment of the trial court is hereby modified by ordering defendant-appellant to pay plaintiff the amount of P4,800,282.91 with interest thereon at the rate of one percent per month from March 22, 1982. The amount of attorney's fees is hereby reduced from P250,000.00 to P50,000.00. The decision is AFFIRMED in all other aspects. 3

In the instant petition for review, petitioner Solid Homes argues (a) that the Court of Appeals should not have awarded attorney's fees, there being an absence of any special finding of fact to justify such award, and (b) that it erred in declaring due and demandable the entire unpaid balance still owing to private respondents.

The Second Division of this Court required respondents to comment on the petition in its Resolution of 22 April 1991. Meanwhile, Atty. Alejandro Barin withdrew as counsel for respondents Investco, Inc., Angela Perez Staley and Antonio Perez, Jr. 4 We required private respondents to submit the name and address of their new counsel; to this day, no compliance has yet been made. In our resolution, dated 01 December 1993, we required the parties to move in the premises and to advise the Court whether "supervening events may have rendered this case moot and academic." 5

Petitioner submitted its compliance and manifested thusly:

In the meantime, on April 15, 1985 before judgment was rendered by the RTC in Civil Case No. 40615 Investco, Inc. (respondent herein) sold the very same parcels of land involved in said case, in favor of Armed Forces of the Philippines Mutual Benefit Association, Inc. (AFPMBAI)

Solid Homes, Inc. (herein petitioner) filed Civil Case No. Q-46570 RTC Quezon City entitled 'Solid Homes, Inc., plaintiff versus AFPMBAI, Investco, Inc. and the Register of Deeds of Quezon City covering titles registered in Quezon City and Civil Case No. 52999 Solid Homes, Inc., plaintiff versus AFPMBAI, Investco, Inc., and Register of Deeds for Pasig covering titles registered in Pasig, Metro Manila, both for nullification of the said second deed of sale over the same properties involved in the instant case.

Quezon City RTC Civil Case No. 46570 was decided in favor of plaintiffs, Solid Homes, Inc.; on appeal, the Court of Appeals (CA G.R. No. 22365) reversed the decision; same was elevated to the Supreme Court where it is pending in SC G.R. No. 100437.

Pasig RTC, Civil Case No. 52999 was decided in favor of plaintiff Solid Homes, Inc.; defendants appealed to the Court of Appeals (CA G.R. No. 27398), which affirmed the RTC Decision; on the main cause of action Petition for Review by this to this Honorable Court is pending under G.R. No. 104769.

Under the circumstances, herein petitioner, in compliance with the Resolution dated December 1, 1993, hereby manifests that supervening events since the Petition herein was filed has not rendered this case as moot and academic, considering that the issue involved is the amount to be paid in SOLID HOMES, INC. as balance on the consideration of the original sale by Investco, Inc. to it and the concomitant transfer of titles to the latter upon payment thereof, whereas in G.R. No. 100437 and G.R. No.

104769, the issue is whether the second buyer AFPMBAI had actual or constructive notice of the prior sale by Investco, Inc. to herein Petitioner, Solid Homes, Inc. 6

As of this late date, the Court has yet to hear from private respondents. Given the premises, and in order to permit this case to be finally resolved and terminated, the required comment on the petition for review should now be, as it is hereby, dispensed with.

Article 2208 of the Civil Code allows attorney's fees to be awarded by a court when its claimant is compelled to litigate with third persons or to incur expenses to protect his interest by reason of an unjustified act or omission of the party from whom it is sought. While judicial discretion is here extant, an award thereof demands, nevertheless, a factual, legal or equitable justification. The matter cannot and should not be left to speculation and conjecture (Mirasol vs. De la Cruz, 84 SCRA 337; Stronghold Insurance Company Inc. vs. Court of Appeals, 173 SCRA 619).

In the case at bench, the records do not show enough basis for sustaining the award for attorney's fees and to adjudge its payment by petitioner. On the contrary, the appellate court itself has found that petitioner's act of withholding payment could not be said to be all that unjustified. The disagreement of the parties on the demandability of the amount still due and the accrual date of interest has persisted largely because of supervening circumstances and the perceived inexplicitness of the contract itself. The decision of the appellate court, has, in fact, reversed that of the trial court on the imposition of interest from 23 February 1981, thus upholding, which we similarly find to be in order, the position of petitioner that the accrual dated should instead start only on 28 March 1982.

Relative to the demandability of the entire unpaid balance, we agree with, and so adopt as our own that of respondent court; viz:

The amount actually paid on account of the contract to buy and sell (Exh. A or 1) is not an area of controversy in the first cause of action. The sum of P2,042,215.00 corresponding to the down payment, as well as P4,084,430.00 with respect to the first four semi-annual installments and a portion of the fifth installment, had been received making a total of P6,126,645.00. It is conceded that a balance of P4,800,282.91 is left unpaid. The dispute is with respect to the period when defendant had defaulted and, consequently, when payment of interest shall begin. The plaintiffs claim that said period should start on February 23, 1981; while the defendant contends that the period must be adjusted should the titles be obtained by the plaintiff corporation after July 22, 1977, as provided in Par. 1(b) of the contract to sell and to buy. Considering that titles were actually transferred to Investco, Inc. between March 21 to March 28, 1979, the defendant avers that the original schedule of payment must not be followed and the 5th installment shall only be due on March 22, 1982.

xxx xxx xxx

It is undisputed that appellant Solid Homes had made a total payment of P6,126,645.00 leaving a balance of P4,800,282.91, which refers to the 6th to the 10th installments. Of the 5th installment due on July 22, 1980, the following payments were made by appellant:

Oct. 30, 1980 to Nov. 10, 1980 P150,000.00Nov. 18, 1980 to Dec. 10, 1980 270,000.00Dec. 18, 1980 to Jan. 14, 1981 101,853.12Jan. 20 to Feb. 12, 1981 95,000.00Feb. 16 to Feb. 19, 1981 115,000.00—————P731,853.12

Thereafter, no further payment was made by appellant contending that under the provisions of paragraph 1(b) of the

contract, the payment schedule should be adjusted. The said provisions states as follows:

Par. 1, sub-par. (b)

Should the FIRST PARTY (plaintiff Investco) obtain titles to the properties above-described after July 22, 1977, the due dates of the downpayment and the subsequent payments on the balance shall be adjusted accordingly.'

Admittedly, the subject titles were obtained during the period of March 21, to March 28, 1979, or after July 22, 1977 (Exhs. D to 1 and Exhs. 2 to 10). Thus, implementing par. 1(b) of the Contract, the due dates of payments should have been adjusted as follows:

Due DatesPer Contract Installment AdjustedSchedule A Number Due Dates

Downpayment

July 22, 1977 March 28, 1979October 22, 1977 June 08, 1979January 22, 1978 September 28, 1979

Balance

July 22, 1978 No. 1 March 08, 1980January 22, 1979 No. 2 September 28, 1980July 22, 1979 No. 3 March 28, 1981January 22, 1981 No. 4 September 28, 1981July 22, 1980 No. 5 March 28, 1982January 22, 1981 No. 6 September 28, 1982July 22, 1981 No. 7 March 28, 1983January 22, 1982 No. 8 September 28, 1983July 22, 1982 No. 9 March 28, 1984January 22, 1983 No. 10 September 28, 1984

In view of the adjustment of due dates in accordance with par. 1(b) of the Contract payments made should correspond to the adjusted dates. Thus, the payment on the 4th installment which is supposed to have been made on January 22, 1980, should be credited on September 28, 1981, and the next payment on the 5th installment which should have been made on July 22, 1981 under the contract would have to be credited on March 28, 1981, the adjusted due date. 7

It is but proper, therefore, to indeed declare 28 March 1982 to be the due date for the payment of the 5th installment. The total amount of P731,853.12, representing payments for the 5th installment made by petitioner, should rightly be credited on 28 March 1982, the adjusted due date. Since no payment appears to have been made after 1981, petitioner should thereby be likewise held in default in the payment of the 6th to the 10th installments. Under the terms of the contract, hereinbefore recited, petitioner's default has effectively activated the acceleration clause of the contract, and we see no error on the part of the appellate court in ordering petitioner to pay the entire unpaid balance of P4,800,282.91 with interest thereon at the rate of 1% per month to be computed from 22 March 1982.

WHEREFORE, except on the award of attorney's fees which is hereby DELETED, the decision of the Court of Appeals is AFFIRMED. No costs.

SO ORDERED.

G.R. No. L-41862 February 7, 1992

B. R. SEBASTIAN ENTERPRISES, INC., petitioner, vs.HON. COURT OF APPEALS, EULOGIO B. REYES, NICANOR G. SALAYSAY, in his capacity as Provincial Sheriff of Rizal, and ANTONIO MARINAS, in his capacity as Deputy Sheriff, respondents.Benito P. Fabie for petitioner.Ildefonso de Guzman-Mendiola for private respondents. DAVIDE, JR., J.:

This is a petition for prohibition and mandamus, with prayer for preliminary injunction, to review the Resolution dated 10 November 1975 of respondent Court of Appeals in C.A.-G.R. No. 53546-R denying petitioner's motion to reinstate its appeal, earlier dismissed for failure to file the Appellant's Brief.

The material operative facts of this case, as gathered from the pleadings of the parties, are not disputed.

Eulogio B. Reyes, now deceased, filed an action for damages with the then Court of First Instance (now Regional Trial Court) of Rizal, Pasay City Branch, against the Director of Public Works, the Republic of the Philippines and petitioner herein, B. R. Sebastian Enterprises, Inc. The case was docketed as Civil Case No. 757-R. 1

On 7 May 1973, the trial court rendered a decision finding petitioner liable for damages but absolving the other defendants. 2

Petitioner, thru its counsel, the law firm of Baizas, Alberto and Associates, timely appealed the adverse decision to the respondent Court of Appeals, which docketed the case as C.A.-G.R. No. 53546-R. 3

During the pendency of the appeal, the plaintiff-appellee therein, Eulogio B. Reyes, died. Upon prior leave of the respondent Court, he was substituted by his heirs — Enrique N. Reyes, Felicisima R. Natividad, Donna Marie N. Reyes and Renne Marie N. Ryes — who are now the private respondents in this present petition.

On 19 February 1974, petitioner, thru its then counsel of record, received notice to file Appellant's Brief within 45 days from receipt thereof. It had, therefore, until 5 April 1974 within which to comply.

Counsel for petitioner failed to file the Brief; thus, on 9 July 1974, respondent Court issued a Resolution requiring said counsel to show cause why the appeal should not be dismissed for failure to file the Appellant's Brief within the reglementary period. 4 A copy of this Resolution was received by counsel for petitioner on 17 July 1974. 5

As the latter failed to comply with the above Resolution, respondent Court, on 9 September 1974, issued another Resolution this time dismissing petitioner's appeal:

It appearing that counsel for defendant-appellant failed to show cause why the appeal should not be dismissed (for failure to file the appellant's brief within the reglementary period which expired on April 5, 1974) within the period of 10 days fixed in the resolution of July 9, 1974, copy of which was received by said counsel on July 17, 1974; . . . 6

On 28 September 1974, petitioner, this time thru the BAIZAS LAW OFFICE, filed a motion for reconsideration 7 of the resolution dismissing its appeal alleging that as a result of the death of Atty. Crispin Baizas, senior partner in the law firm of BAIZAS, ALBERTO & ASSOCIATES, the affairs of the said firm are still being settled between Atty. Jose Baizas (son of Crispin Baizas) and Atty. Ruby Alberto, the latter having established her own law office; furthermore, Atty. Rodolfo Espiritu, the lawyer who handled this case in the trial court and who is believed to have also attended to the preparation of the Appellant's Brief but failed to submit it through oversight and inadvertence, had also left the firm.

In its Resolution of 9 October 1974, respondent Court denied the motion for reconsideration, stating that:

Upon consideration of the motion of counsel for defendant-appellant, praying, on the grounds therein stated, that the resolution of September 9, 1974, dismissing the appeal, be set aside, and that appellant be granted a reasonable period of time within which to file its brief: considering that six (6) months had elapsed since the expiration of the original period and more than two and one-half (2-½) months since counsel received copy of the resolution requiring him to show cause why the appeal should not be dismissed for failure to file brief; Motion Denied. 8

No action having been taken by petitioner from the above Resolution within the period to file a petition for review, the same became final and executory, and the records of the case were remanded to the court of origin for execution.

The trial court issued a writ of execution on 21 October 1975. 9 Pursuant thereto, respondent Provincial Sheriff and Deputy Sheriff attached petitioner's Hough Pay Loader with Hercules Diesel Engine and issued on 5 November 1975 a Notice of Sheriff's Sale, scheduling for Friday, 14 November 1975 at 10:00 o'clock in the morning, the auction sale thereof. 10

On 6 November 1975, petitioner filed with respondent Court a Motion to Reinstate Appeal with Prayer for Issuance of a Writ of Preliminary Injunction 11 dated 5 November 1975, and containing the following allegations:

1. That late as it may be, this Honorable Court has the inherent power to modify and set aside its processes, in the interest of justice, especially so in this case when the case was dismissed on account of the untimely death of Atty. Crispin D. Baizas, counsel of BRSEI (B.R. Sebastian Enterprises, Inc.).

2. That to dismiss the case for failure to file the appellant's brief owing to the untimely death of the late Atty. Crispin D. Baizas would be tantamount to denying BRSEI its (sic) day in court, and is, therefore, a clear and unmistakable denial of due process on the part of BRSEI.

3. That to reinstate BRSEI's appeal would not impair the rights of the parties, since all that BRSEI is asking for, is a day in court to be heard on appeal in order to have the unfair, unjust and unlawful decision, set aside and reversed.

The respondent Court denied the said motion in its Resolution of 10 November 1975: 12

. . . it appearing that appellant was represented by the law firm of Baizas, Alberto & Associates, and while Atty. Baizas died on January 16, 1974, his law firm was not dissolved since it received the notice to file brief on February 19, 1974, and the copy of the Resolution of July 9, 1974, requiring appellant to show cause why the appeal should not be dismissed was received by the law firm on July 17, 1974 and no cause was shown; . . .

Hence, on 13 November 1975, petitioner filed the original petition 13 in this case against the Court of Appeals, Eulogio B. Reyes, Nicanor G. Salaysay, as Provincial Sheriff of Rizal, and Antonio Marinas, as Deputy Sheriff. The petition likewise prayed for the issuance of a Temporary Restraining Order.

In the Resolution of 13 November 1975, this Court required respondents to comment on the petition within ten (10) days from receipt thereof, and issued a Temporary Restraining Order. 14

On 12 January 1976, respondents filed a Partial Comment on the Petition with a Motion to Suspend the Proceedings 15 on the ground that respondent

Eulogio B. Reyes is already dead and his lawful heirs had already been ordered substituted for him during the pendency of the appeal before the respondent Court of Appeals.

In the Resolution of 21 January 1976, this Court ordered petitioner to amend its petition within then (10) days from receipt of notice, and suspended the filing of respondents' Comment until after the amendment is presented and admitted. 16

In compliance therewith, petitioner filed on 9 February 1976 a Motion for Leave to Admit Amended Petition to which it attached the said Amended Petition. 17 The amendment consists in the substitution of Eulogio B. Reyes with his heirs.

This Court admitted the Amended Petition 18 and required the respondents to file their Comment within ten (10) days from notice thereof, which they complied with on 5 April 1976. 19 Petitioner filed its Reply to the Comment on 29 April 1976.20

In the Resolution of 12 May 1976, this Court denied the petition for lack of merit: 21

L-41862 (B.R. Sebastian Enterprises, Inc. vs. Court of Appeals, et. al.). — Considering the allegations, issues and arguments adduced in the amended petition for review on certiorari of the decision of the Court of Appeals, respondents' comment thereon, as well as petitioner's reply to said comment, the Court Resolved to DENY the petition for lack of merit.

However, on 31 May 1976, petitioner filed a motion for its reconsideration 22 claiming that since it was deprived of the right to appeal without fault on its part, the petition should be given due course.

Respondents submitted on 22 July 1976 their Comment 23 to said Motion for Reconsideration.

On 10 September 1976, this Court resolved to reconsider 24 its Resolution of 12 May 1976 and required both parties to submit simultaneously their respective Memoranda within thirty (30) days from notice thereof.

Petitioner submitted its Memorandum on 5 November 1976 25 while respondents submitted theirs on 22 November 1976. 26 On 29 November 1976, this Court deemed the present case submitted for decision. 27

The sole issue to be addressed is whether or not the respondent Court of Appeals gravely abused its discretion in denying petitioner's motion to reinstate its appeal, previously dismissed for failure to file the Appellant's Brief.

Petitioner, in its Memorandum, extensively expounds on respondent Court's authority to reinstate dismissed appeals and cites as basis thereof the decision of this Court in Heirs of Clemente Celestino vs. Court of Appeals, et al., 28 Indeed, in said case, this Court affirmed the resolution of the Court of Appeals — reinstating an appeal after being dismissed for failure by the appellants therein to file their brief, and after entry of judgment and remand of the records to the lower court — and cancelled the entry of judgment, requiring the lower court to return the records to the Court of Appeals and admit appellant's brief. Said case, however, had a peculiar or singular factual situation" which prompted the Court of Appeals to grant the relief and which this Court found sufficient to justify such action. As this Court, through Associate Justice Ramon Aquino, said:

We are of the opinion that under the peculiar or singular factual situation in this case and to forestall a miscarriage of justice the resolution of the Court of Appeals reinstating the appeal should be upheld.

That Court dismissed the appeal of the Pagtakhans in the mistaken belief that they had abandoned it because they allegedly failed to give to their counsel the money needed for paying the cost of printing their brief.

But presumably the Appellate Court realized later that fraud might have been practised on appellants Pagtakhans since their oppositions were not included in the record on appeal. In (sic) sensed that there was some irregularity in the actuations of their lawyer and that Court (sic) itself had been misled into dismissing the appeal.

Counsel for the Pagtakhans could have furnished them with copies of his motions for extension of time to file brief so that they would have known that the Court of Appeals had been apprised of their alleged failure to defray the cost of printing their brief and they could have articulated their reaction directly to the Court. Counsel could have moved in the Appellate Court that he be allowed to withdraw from the case or that the Pagtakhans be required to manifest whether they were still desirous of prosecuting their appeal or wanted a mimeographed brief to be filed for them (See People vs. Cawili, L-30543, August 31, 1970, 34 SCRA 728). Since counsel did none of those things, his representation that the appellants had evinced lack of interest in pursuing their appeal is difficult to believe.

If the appellate court has not yet lost its jurisdiction, it may exercise its discretion in reinstating an appeal, having in mind the circumstances obtaining in each case and the demands of substantial justice (Alquiza vs. Alquiza, L-23342, February 10, 1968, 22 SCRA 494, 66 O.G. 276; C. Vda. de Ordoveza vs. Raymundo, 62 Phil. 275; Chavez vs. Ganzon, 108 Phil. 6).

But even if it has already lost jurisdiction over the appeal by reason of the remand of the record to the lower court, it, nevertheless, has the inherent right to recall the remittitur or the remand of the record to the lower court if it had rendered a decision or issued a resolution which was induced by fraud practised upon it. Such a right is not affected by the statutory provision that after the record has been remanded, the appellate court has no further jurisdiction over the appeal (5 Am Jur. 2nd 433 citingLovett vs. State, 29 Fla. 384, 11 So. 176; 84 ALR 595; State vs. Ramirez, 34 Idaho 623, 203 Pac. 279).

In the instant case, no fraud is involved; what obtain is simple negligence on the part of petitioner's counsel, which is neither excusable nor unavoidable. Petitioner thus failed to demonstrate sufficient cause to warrant a favorable action on its plea.

As held in Chavez, et al. vs. Ganzon, et al., 29 and reiterated in Negros Stevedoring Co., Inc. vs. Court of Appeals, 30We said:

Granting that the power or discretion to reinstate an appeal that had been dismissed is included in or implied from the power or discretion to dismiss an appeal, still such power or discretion must be exercised upon a showing of good and sufficient cause, in like manner as the power or discretion vested in the appellate court to allow extensions of time for the filing of briefs. There must be such a showing which would call for, prompt and justify its exercise (sic). Otherwise, it cannot and must not be upheld.

To justify its failure to file the Appellant's Brief, petitioner relies mainly on the death of Atty. Crispin Baizas and the supposed confusion it brought to the firm of BAIZAS, ALBERTO & ASSOCIATES. It says: 31

Petitioner, thru its president Bernardo R. Sebastian, engaged the services of Atty. Crispin D. Baizas to handle its defense in Civil Case No. 757-R; however, it appears that Atty. Baizas entered petitioner's case as a case to be handled by his law firm operating

under the name and style "Crispin D. Baizas & Associates." Hence, the Answer to the complaint, Answer to Cross-Claim, and Answer to Fourth-party Complaint filed for petitioner in said case, evince that the law firm "Crispin D. Baizas & Associates" represents petitioner in the action.

After rendition of the assailed Decision of the trial court, petitioner's counsel appears to have changed its firm name to "Baizas, Alberto & Associates." The appeal was thus pursued for petitioner by the law firm "Baizas, Alberto & Associates."

On January 16, 1974, Atty. Crispin D. Baizas died as a result of a brief heart attack. In consequence (sic) of his death, the law firm "Baizas, Alberto & Associates" was in a terribly confused state of affairs. In effect, said law firm was dissolved. Atty. Ruby Alberto formed her own law office and other associates left the dissolved law firms (sic) joining other offices or putting up their own. Atty. Jose Baizas, son of deceased Crispin D. Baizas, took over the management of why may have been left of his father's office, it appearing that some, if not many, cases of the defunct office were taken over by the associates who left the firm upon its dissolution.

But, none of the former partners and associates/assistants of the dissolved law firm filed the required appellant's brief for herein petitioner in its appealed case before the respondent Court of Appeals. No notice was served upon petitioner by any of the surviving associates of the defunct law firm that its appellant's brief was due for filing or that the law office had been dissolved and that the law office had been dissolved and that none of the lawyers herein formerly connected desired to handle the appealed case of petitioner. . . .

The circumstances that the law firm "Baizas, Alberto & Associates" was dissolved and that none of the associates took over petitioner's case, and no notice of such state of affairs was given to petitioner who could have engaged the services of another lawyer to prosecute its appeal before respondent Court, constitutes (sic) an UNAVOIDABLE CASUALTY that entitles petitioner to the relief prayed for. On the other hand, the non-dissolution of said law firm "Baizas, Alberto & Associates" will not defeat petitioner's claim for relief since, in such event, the said firm had ABANDONED petitioner's cause, which act constitutes fraud and/or reckless inattention the result of which is deprivation of petitioner's day in court. In the abovementioned Yuseco case, this Honorable Court had emphatically and forcefully declared that it will always be disposed to grant relief to parties aggrieved by perfidy, fraud, reckless inattention and downright incompetence of lawyers, which has the consequence of depriving their day (sic) in court.

We find no merit in petitioner's contentions. Petitioner's counsel was the law firm of BAIZAS, ALBERTO & ASSOCIATES and not merely Atty. Crispin Baizas. Hence, the death of the latter did not extinguish the lawyer-client relationship between said firm and petitioner.

In Gutierrez & Sons, Inc. vs. Court of Appeals, 32 the appeal filed by the law firm of BAIZAS, ALBERTO & ASSOCIATES on behalf of respondent therein was dismissed for failure to comply with the requisites enumerated in the Rules of Court; the excuse presented by said counsel was also the death of Atty. Crispin Baizas. This Court held therein that:

The death of Attorney Baizas was not a valid excuse on the part of his associates for not attending to Alvendia's appeal, supposing arguendo that his office was solely entrusted with the task of representing Alvendia in the Court of Appeals. Attorney Espiritu (not Attorney Baizas) was the one actually collaborating with Viola in handling Alvendia's case. He did not file a formal appearance in the Court of Appeals.

Undoubtedly, there was inexcusable negligence on the part of petitioner's counsel in failing to file the Appellant's Brief. As revealed by the records, petitioner's counsel, the BAIZAS ALBERTO & ASSOCIATES law firm, received the notice to file Brief on 19 February 1974. It failed to do so within the 45 days granted to it. Said law firm also received a copy of the respondent Court's Resolution of 9 July 1974 requiring it to show cause why the appeal should not be dismissed for failure to file the Brief within the reglementary period. Petitioner chose not to comply with it, thus compelling the respondent Court to issue on 9 September 1974 a Resolution dismissing the appeal, a copy of which the former also received. Then, on 28 September 1974, the BAIZAS LAW OFFICE moved for reconsideration of the said Resolution which respondent Court denied in its Resolution of 9 October 1974. Nothing more was heard from petitioner until after a year when, on 6 November 1975, it filed the instant petition in reaction to the issuance of a writ of execution by the trial court following receipt of the records for the respondent Court.

The "confusion" in the office of the law firm following the death of Atty. Crispin Baizas is not a valid justification for its failure to file the Brief. With Baizas' death, the responsibility of Atty. Alberto and his Associates to the petitioner as counsel remained until withdrawal by the former of their appearance in the manner provided by the Rules of Court. This is so because it was the law firm which handled the case for petitioner before both the trial and appellate courts. That Atty. Espiritu, an associate who was designated to handle the case, later left the office after the death of Atty. Baizas is of no moment since others in the firm could have replaced him.. Upon receipt of the notice to file Brief, the law firm should have re-assigned the case to another associate or, it could have withdrawn as counsel in the manner provided by the Rules of Court so that the petitioner could contract the services of a new lawyer.

In the Negros Stevedoring case, supra., this Court held:

The negligence committed in the case at bar cannot be considered excusable, nor (sic) is it unavoidable. Time and again the Court has admonished law firms to adopt a system of distributing pleadings and notices, whereby lawyers working therein receive promptly notices and pleadings intended for them, so that they will always be informed of the status of their cases. Their Court has also often repeated that the negligence of clerks which adversely affect the cases handled by lawyers, is binding upon the latter.

Compounding such negligence is the failure of the BAIZAS LAW OFFICE, which filed on 28 September 1974 the motion for reconsider the Resolution of 9 September 1974, to take any further appropriate action after the respondent Court denied said motion on 9 October 1974. The appearance of said counsel is presumed to be duly authorized by petitioner. The latter has neither assailed nor questioned such appearance.

The rule is settled that negligence of counsel binds the client. 33

Moreover, petitioner itself was guilty of negligence when it failed to make inquiries from counsel regarding its case. As pointed out by respondents, the president of petitioner corporation claims to be the intimate friend of Atty. Crispin Baizas; hence, the death of the latter must have been known to the former. 34 This fact should have made petitioner more vigilant with respect to the case at bar. Petitioner failed to act with prudence and diligence, thus, its plea that they were not accorded the right to procedural due process cannot elicit either approval or sympathy. 35

Based on the foregoing, it is clear that there was failure to show a good and sufficient cause which would justify the reinstatement of petitioner's appeal. Respondent Court of Appeals did not them commit any grave abuse of discretion when it denied petitioner's motion to reinstate its appeal.

WHEREFORE, the Petition is hereby DISMISSED and the temporary restraining order issued in this case is lifted.

Costs against petitioner.

IT SO ORDERED.

A. C. No. 7421 October 10, 2007

ELISA V. VENTEREZ, GENARO DE VERA, INOCENCIA V. RAMIREZ, PACITA V. MILLS, ANTONINA V. PALMA and RAMON DE VERA, Complainants, vs.ATTY. RODRIGO R. COSME, Respondent.

R E S O L U T I O N

CHICO-NAZARIO, J.:

Before Us is a Complaint filed by complainants Eliza V. Venterez, Genaro de Vera, Inocencia V. Ramirez, Pacita V. Mills, Antonina V. Palma and Ramon de Vera against respondent Atty. Rodrigo R. Cosme, charging the latter with Abandonment, Gross Negligence and Dereliction of Duty.

Complainants contracted the legal services of respondent in Civil Case No. 981 entitled, "Sps. Daniel and Lolita Oviedo, et al. v. Eliza de Vera, et al.," for Declaration of Ownership with Damages filed before the Municipal Trial Court (MTC) of Calasiao, Pangasinan. Respondent represented the complainants, who were defendants in said case, until a Decision thereon was rendered by the MTC on 25 February 2004. The MTC ruled against the complainants. Respondent received a copy of the said Decision on 3 March 2004.

Complainants alleged that they directed the respondent to either file a Motion for Reconsideration or a Notice of Appeal, but respondent failed or refused to do so. The 15-day period within which to file an appeal or a motion for reconsideration of the MTC Decision expired on 18 March 2004. Complainant Elisa V. Venterez was constrained to contract another lawyer to prepare the Motion for Reconsideration which was filed on 19 March 2004. It must be stressed that the said motion was signed by complainant Elisa V. Venterez herself as the said lawyer did not enter his appearance.

On 23 March 2004, the said Motion for Reconsideration was denied1 by the MTC. Respondent was not furnished a copy of the denial of the motion per a Certification2 issued by Clerk of Court II Zenaida C. de Vera. On 31 March 2004, a Motion for Issuance of Writ of Execution3 was filed by the plaintiffs in Civil Case No. 981 but respondent never bothered to file an opposition to or any comment on the said motion despite receipt thereof. The motion was eventually granted4 by the MTC on 23 April 2004. On 28 April 2004, a Writ of Execution5 was issued and on 26 April 2004, an Entry of Judgment6 was made in the said case.

Two months after respondent received a copy of the Decision, the respondent filed his Notice of Retirement of Counsel with the MTC on 3 May 2004.

Feeling aggrieved by respondent’s actuations, complainants filed the instant administrative complaint against him.7

In his Answer,8 respondent denied the claim of complainants that soon after the Decision was rendered by the MTC, they (complainants) directed him to file an appeal or a motion for reconsideration thereof. For his defense, respondent averred that Salvador Ramirez (the son of one of the complainants, Inocencia V. Ramirez), informed him that "he [was] withdrawing the case from the respondent because he already engaged another lawyer to take over the case, so respondent gave the records of the case to him." Respondent explained that "after Salvador Ramirez withdrew the case from the respondent, and engaged another lawyer, the respondent turned over the records of the case to him and the respondent ceased as the counsel of the complainants." Respondent further alleged that the said Motion for Reconsideration was already prepared by another lawyer. He denied being furnished a copy of the Motion for Reconsideration allegedly

prepared and filed by another lawyer engaged by complainant Elisa V. Venterez and that he was served with a copy of the denial of the said Motion by the MTC. Respondent also clarified that the "last day of the 15-day period for the perfection of the appeal is 19 March 2004 since a copy of the decision was served on the respondent on 4 March 2004." Finally, respondent argued that "when the respondent was served a copy of the Motion for Writ of Execution, he immediately notified Salvador Ramirez about said Motion but Salvador Ramirez came to see the respondent only on 3 May 2005, when the respondent asked him to sign a Notice of Retirement of Counsel signed by Salvador Ramirez which respondent immediately filed in court."

Pursuant to the complaint, a hearing was conducted by the Commission on Bar Discipline of the Integrated Bar of the Philippines (IBP) at the IBP Building, Ortigas Center, Pasig City, on 15 February 2006.

On 11 April 2006, Investigating Commissioner Dennis A. B. Funa submitted his Report and Recommendation,9finding respondent liable for gross negligence and recommending the imposition upon him of the penalty of three months suspension, to wit:

PREMISES CONSIDERED, it is submitted that Respondent is GUILTY of Gross Negligence and should be given the penalty of THREE (3) MONTHS SUSPENSION.

Thereafter, the IBP Board of Governors passed Resolution10 No. XVII-2006-457 dated 8 September 2006, approving and adopting the recommendation of the Investigating Commissioner, thus:

RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the Report and Recommendation of the Investigating Commissioner of the above-entitled case, herein made part of this Resolution as Annex "A"; and, finding the recommendation fully supported by the evidence on record and the applicable laws and rules, and considering that Respondent is guilty of gross negligence, Atty. Rodrigo Cosme is hereby SUSPENDED from the practice of law for three (3) months.11

We sustain the findings and recommendation of the IBP Board of Governors.

The core issue is whether the respondent committed culpable negligence in handling complainants’ case, as would warrant disciplinary action.

No lawyer is obliged to advocate for every person who may wish to become his client, but once he agrees to take up the cause of a client, the lawyer owes fidelity to such cause and must be mindful of the trust and confidence reposed in him.12 Among the fundamental rules of ethics is the principle that an attorney who undertakes an action impliedly stipulates to carry it to its termination, that is, until the case becomes final and executory. A lawyer is not at liberty to abandon his client and withdraw his services without reasonable cause and only upon notice appropriate in the circumstances.13 Any dereliction of duty by a counsel affects the client.14 This means that his client is entitled to the benefit of any and every remedy and defense that is authorized by the law and he may expect his lawyer to assert every such remedy or defense.15

The Decision in Civil Case No. 981 was rendered by the MTC of Calasaio, Pangasinan, on 25 February 2004. Respondent admitted16 that he was served a copy of the said Decision on 4 March 2004. After having received a copy of the MTC Decision, respondent did not bother to file a Motion for Reconsideration or a notice of appeal with the proper courts. Thus, complainants were compelled to engage the services of a new counsel to file a Motion for Reconsideration with the MTC who did not, however, enter his appearance as new counsel. It bears stressing that during this time, respondent had not yet filed any notice of withdrawal as counsel for the complainants in Civil Case No. 981. Respondent only formally withdrew as counsel for complainant in Civil Case No. 981 when he filed with the MTC his Notice17 of Retirement as Counsel on 5 May 2004, on the ground that "he was also retired as Counsel for the [complainants] two days after he received copy of the decision rendered in this case when SALVADOR RAMIREZ, a

representative of the [complainants], withdrew all the records of the case from [respondent] to be given to his new counsel."

We cannot accept respondent’s defense that he had already withdrawn from the case two days after his receipt of the MTC Decision and that he had allegedly communicated this withdrawal to Salvador Ramirez, son of one of the herein complainants, Inocencia Ramirez. It is an apparent attempt on the part of respondent to wash his hands of any liability for failing to pursue any of the available remedies to complainants from the adverse MTC Decision.

The rule in this jurisdiction is that a client has the absolute right to terminate the attorney-client relation at any time with or without cause.18 The right of an attorney to withdraw or terminate the relation other than for sufficient cause is, however, considerably restricted.19 Among the fundamental rules of ethics is the principle that an attorney who undertakes to conduct an action impliedly stipulates to carry it to its conclusion.20 He is not at liberty to abandon it without reasonable cause.21 A lawyer's right to withdraw from a case before its final adjudication arises only from the client's written consent or from a good cause.22

Section 26, Rule 138 of the Revised Rules of Court provides:

Sec. 26. Change of attorneys -- An attorney may retire at any time from any action or special proceeding, by the written consent of his client filed in court. He may also retire at any time from an action or special proceeding, without the consent of his client, should the court, on notice to the client and attorney, and on hearing, determine that he ought to be allowed to retire. In case of substitution, the name of the attorney newly employed shall be entered on the docket of the court in place of the former one, and written notice of the change shall be given to the adverse party.

A lawyer may retire at any time from any action or special proceeding with the written consent of his client filed in court and with a copy thereof served upon the adverse party. Should the client refuse to give his consent, the lawyer must file an application with the court. The court, on notice to the client and adverse party, shall determine whether the lawyer ought to be allowed to retire. The application for withdrawal must be based on a good cause.23

What constitute good cause for the withdrawal of services by the counsel are identified under Rule 22.01, Canon 22 of the Code of Professional Responsibility, which provides:

CANON 22 -- A LAWYER SHALL WITHDRAW HIS SERVICES ONLY FOR GOOD CAUSE AND UPON NOTICE APPROPRIATE IN THE CIRCUMSTANCES.

Rule 22.01-- A lawyer may WITHDRAW his services in any of the following cases:

a) When the client pursues an illegal or immoral course of conduct in connection with the matter he is handling;

b) When the client insists that the lawyer pursue conduct violative of these canons and rules;

c) When his inability to work with co-counsel will not promote the best interest of the client;

d) When the mental or physical condition of the lawyer renders it difficult for him to carry out the employment effectively;

e) When the client deliberately fails to pay the fees for the services or fails to comply with the retainer agreement;

f) When the lawyer is elected or appointed to public office; and

g) Other similar cases.

The instant case does not fall under any of the grounds aforementioned. Neither can the circumstances of this case be considered analogous to the grounds thus explicitly enumerated. Contrary to respondent’s contention, his professional relations as a lawyer with his clients are not terminated by the simple turnover of the records of the case to his clients. Respondent’s defense completely crumbles in face of the fact that Salvador Ramirez is not even a party in Civil Case No. 981 and, hence, had no authority to withdraw the records of the said case from respondent or to terminate the latter’s services.

Assuming, nevertheless, that respondent was justified in withdrawing his services, he, however, cannot just do so and leave complainants in the cold, unprotected. The lawyer has no right to presume that his petition for withdrawal will be granted by the court.24 Until his withdrawal shall have been approved, the lawyer remains counsel of record who is expected by his clients, as well as by the court, to do what the interests of his clients require.25 He must still appear before the court to protect the interest of his clients by availing himself of the proper remedy, for the attorney-client relations are not terminated formally until there is a withdrawal of record.

Without a proper revocation of his authority and withdrawal as counsel, respondent remains counsel of record for the complainants in Civil Case No. 981; and whether he has a valid cause to withdraw from the case, he cannot immediately do so and leave his clients without representation. An attorney may only retire from the case either by a written consent of his client or by permission of the court after due notice and hearing, in which event, the attorney should see to it that the name of the new attorney is recorded in the case.26 Respondent did not comply with these obligations. Therefore, he remains the counsel of record for the complainants in Civil Case No. 981 with the duty to protect complainants’ interest. Had he made the necessary inquiries as to the status of the case, he would have known that he was still the counsel of record as no entry of appearance was ever made by another counsel. It would have been easily discernible on his part that there was no change in his status as complainants’ lawyer. As of that time, their client-lawyer relationship was still subsisting. Therefore, he would have known that the Motion for Reconsideration was denied; and a writ of execution had been issued under the circumstances.

All told, we rule and so hold that on account of respondent’s failure to protect the interest of complainants, respondent indeed violated Rule 18.03, Canon 18 of the Code of Professional Responsibility, which states that "a lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection therewith shall render him liable." Respondent is reminded that the practice of law is a special privilege bestowed only upon those who are competent intellectually, academically and morally. This Court has been exacting in its expectations for the members of the Bar to always uphold the integrity and dignity of the legal profession and refrain from any act or omission which might lessen the trust and confidence of the public.1âwphi1

The determination of the appropriate penalty to be imposed on an errant lawyer involves the exercise of sound judicial discretion based on the facts of the case.27 In cases of similar nature, the penalty imposed by the Court consisted of reprimand,28 fine of five hundred pesos with warning,29 suspension of three months,30 six months31and even disbarment32 in an aggravated case.

The facts of the case show that respondent failed to live up to his duties as a lawyer pursuant to the Code of Professional Responsibility. We conclude that a 3-month suspension from the practice of law is a just penalty under the circumstances.

WHEREFORE, the resolution of the IBP Board of Governors approving and adopting the report and recommendation of the Investigating Commissioner is hereby AFFIRMED. Accordingly, ATTY. RODRIGO R. COSME is hereby SUSPENDED from the practice of law for a period of THREE (3) MONTHS, with a stern warning that a repetition of the same or similar wrongdoing will be dealt with more severely.

Let a copy of this decision be attached to respondent’s personal record with the Office of the Bar Confidant and copies be furnished to all chapters of the Integrated Bar of the Philippines and to all courts of the land.

SO ORDERED

A.C. No. 3773 September 24, 1997ANGELITA C. ORCINO, complainant, vs.ATTY. JOSUE GASPAR, respondent. PUNO, J.:

On June 14, 1992, complainant Angelita C. Orcino filed with this Court a letter-complaint dated December 10, 1991 against respondent Atty. Josue Gaspar, her former counsel. Complainant prayed that this Court impose disciplinary sanctions on respondent for abandoning his duties and for failing to return the legal fees she fully paid for his services.

The complaint arose from the following facts: Complainant engaged the services of respondent to prosecute a criminal case she intended to file against several suspects in the slaying of her husband. In consideration thereof, complainant bound herself to pay respondent legal fees of P20,000.00 — P10,000.00 to be paid upon signing of the contract and the balance to be paid on or before the conclusion of the case. Complainant was also to pay P500.00 per appearance of respondent before the court and fiscal. This agreement was embodied in a contract executed on February 22, 1991. 1

In accordance with the contract, complainant paid respondent the sum of P5,000.00 on February 25, 1991, 2another P5,000.00 on March 31, 1991, 3 and P10,000.00 on May 21, 1991, 4 for a total of P20,000.00.

Forthwith, respondent entered into his duties. He interviewed witnesses and gathered evidence to build a case against the suspects. He drew up the necessary sworn statements and dutifully attended the preliminary investigation. The case was thereafter filed with the Regional Trial Court, Branch 37, Baloc, Sto. Domingo, Nueva Ecija. 5

As private prosecutor, respondent religiously attended the bail hearings for the accused although these hearings were postponed on motion of the accused's counsel. Respondent however failed to attend the hearing scheduled in August 1991. It was at this nearing that the court, over complainant's objections, granted bail to all the accused. After the hearing, complainant immediately went to respondent's residence and confronted him with his absence. 6Respondent explained that he did not receive formal notice of the hearing. 7 Complainant became belligerent and started accusing him of jeopardizing the case by his absence. Respondent said that her suspicions were based on rumors and intrigues fed to her by her relatives. 8 Complainant, however, continued accusing him belligerently. She asked for the records of the case saying that she could refer them to another lawyer. Stung by her words, respondent gave her the records. 9

Complainant never returned the records nor did she see respondent. On September 18, 1991, respondent filed before the trial court a "Motion to Withdraw as Counsel." 10 The motion did not bear the consent of complainant.

On October 23, 1991, the court issued an order directing respondent to secure complainant's consent to the motion "and his appearance as private prosecutor shall continue until he has secured this consent." 11

Complainant refused to sign her conformity to respondent's withdrawal. 12 Meanwhile, the hearings in the criminal case continued. Respondent did not appear at the hearings nor did he contact complainant. Complainant was thus compelled to engage the services of another lawyer. Hence, the letter-complaint.

We referred the letter-complaint to the Integrated Bar of the Philippines, Commission on Bar Discipline, for investigation, report and recommendation.

The rule in this jurisdiction is that a client has the absolute right to terminate the attorney-client relation at any time with or without cause. 13 The right of an attorney to withdraw or terminate the relation other than for sufficient cause is, however, considerably restricted. 14 Among the fundamental rules of ethics is the principle that an attorney who undertakes to conduct an action impliedly stipulates to carry it to its conclusion. 15 He is not at liberty to abandon it without reasonable cause. 16 A lawyer's right to withdraw from a case before its final adjudication arises only from the client's written consent or from a good cause. 17

Section 26 of Rule 138 of the Revised Rules of Court provides:

Sec. 26. Change of attorneys — An attorney may retire at any time from any action or special proceeding, by the written consent of his client filed in court. He may also retire at any time from an action or special proceeding, without the consent of his client, should the court, on notice to the client and attorney, and on hearing, determine that he ought to be allowed to retire. In case of substitution, the name of the attorney newly employed shall be entered on the docket of the court in place of the former one, and written notice of the change shall be given to the adverse party.

xxx xxx xxx

A lawyer may retire at any time from any action special proceeding with the written consent of his client filed in court and copy thereof served upon the adverse party. Should the client refuse to give his consent, the lawyer must file an application with the court. The court, on notice to the client and adverse party, shall determine whether he ought to be allowed to retire. The application for withdrawal must be based on a good cause. 18

In the instant case, complainant did not give her written consent to respondent's withdrawal. The court thus ordered respondent to secure this consent. Respondent allegedly informed the court that complainant had become hostile and refused to sign his motion. 19 He, however, did not file an application with the court for it to determine whether he should be allowed to withdraw.

Granting that respondent's motion without complainant's consent was an application for withdrawal with the court, we find that this reason is insufficient to justify his withdrawal from the case. Respondent's withdrawal was made on the ground that "there no longer exist[ed] the . . . confidence" between them and that there had been "serious differences between them relating to the manner of private prosecution." 20

Rule 22.01 of Canon 22 of the Code of Professional Responsibility provides:

CANON 22 — A LAWYER SHALL WITHDRAW HIS SERVICES ONLY FOR GOOD CAUSE AND UPON NOTICE APPROPRIATE IN THE CIRCUMSTANCES.

Rule 22.01— A lawyer may withdraw his services in any of the following cases:

a) When the client pursues an illegal or immoral course of conduct in connection with the matter he is handling;

b) When the client insists that the lawyer pursue conduct violative of these canons and rules;

c) When his inability to work with co-counsel will not promote the best interest of the client;

d) When the mental or physical condition of the lawyer renders it difficult for him to carry out the employment effectively;

e) When the client deliberately fails to pay the fees for the services or fails to comply with the retainer agreement;

f) When the lawyer is elected or appointed to public office; and

g) Other similar cases.

A lawyer may withdraw his services from his client only in the following instances: (a) when a client insists upon an unjust or immoral conduct of his case; (b) when the client insists that the lawyer pursue conduct violative of the Code of Professional Responsibility; (c) when the client has two or more retained lawyers and the lawyers could not get along to the detriment of the case; (d) when the mental or physical condition of the lawyer makes him incapable of handling the case effectively; (e) when the client deliberately fails to pay the attorney's fees agreed upon; (f) when the lawyer is elected or appointed to public office; (g) other similar cases.

The instant case does not fall under any of the grounds mentioned. Neither can this be considered analogous to the grounds enumerated. As found by the Commission on Bar Discipline, this case arose from a simple misunderstanding between complainant and respondent. Complainant was upset by respondent's absence at the hearing where bail was granted to the suspected killers of her husband. She vehemently opposed the grant of bail. It was thus a spontaneous and natural reaction for her to confront respondent with his absence. Her belligerence arose from her overzealousness, nothing more. Complainant's words and actions may have hurt respondent's feelings considering the work he had put into the case. But her words were uttered in a burst of passion. And even at that moment, complainant did not expressly terminate respondent's services. She made this clear when she refused to sign his "Motion to Withdraw as Counsel."

Assuming, nevertheless, that respondent was justified in terminating his services, he, however, cannot just do so and leave complainant in the cold unprotected. The lawyer has no right to presume that his petition for withdrawal will be granted by the court. 21 Until his withdrawal shall have been approved, the lawyer remains counsel of record who is expected by his client as well as by the court to do what the interests of his client require. 22 He must still appear on the date of hearing 23 for the attorney-client relation does not terminate formally until there is a withdrawal of record. 24

Respondent expressly bound himself under the contract to bring the criminal case to its termination. He was in fact paid in full for his services. Respondent failed to comply with his undertaking, hence, it is but fair that he return to complainant half of the amount paid him. The peculiar circumstances of the case have rendered it impossible for respondent and complainant to continue their relation under the contract.

IN VIEW WHEREOF, respondent is admonished to exercise more prudence and judiciousness in dealing with his clients. He is also ordered to return to complainant within fifteen (15) days from notice the amount of ten thousand pesos (P10,000.00) representing a portion of his legal fees received from the latter with a warning that failure on his part to do so will result in the imposition of stiffer disciplinary action.

SO ORDERED.

Regalado and Torres, Jr., JJ., concur.

Mendoza, J., is on leave.